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BOE maintains rates, stock of assets
As widely expected, the Bank of England (BOE) left its benchmark Bank Rate at 0.50 percent and the stock of assets purchased by issuing reserves to commercial banks at 375 billion pounds.
The BOE, which has kept its key rate at technically zero since March 2009 to aid the recovery after the financial crises, added in its usual brief statement that the minutes of its meeting on June 3 would be published on June 17.
But starting from August 6, the BOE will move to a new release schedule in which it will release policy decisions and minutes at the same time. So far these reports have been issued separately, normally leading to intense speculation in financial markets.
In the future, the BOE's Monetary Policy Committee (MPC) will meet for two days to discuss economic developments, then gather again the following week to vote on a decision. The outcome of this vote and the minutes of the previous week's meeting will then be released simultaneously.
In the case of August 6, the BOE will also release the quarterly inflation report at the same time.
The MPC is planning to reduce the number of meetings each year to eight from the current 12, a format the European Central Bank recently adopted and also used by the U.S. Board of Governors. This new schedule is first expected to start in 2016 and hinges on new legislation being passed.
Inflation in the United Kingdom fell to minus 0.1 percent in April, the first time of deflation since 1960, but something that was flagged by the BOE. The lack of inflationary pressure has also helped push back the time frame for any rate increase to early 2016. The BOE has said it first expects to start raising rates in around 12 months while financial markets are looking at a hike in the first quarter.
Inflation is first expected to reach the BOE's 2 percent by late 2016 and BOE officials have frequently underscored that future rate rises will be gradual and may not return to levels as high as before the financial crises.
The Gross Domestic Product of the U.K. expanded by 0.3 percent in the first quarter from the fourth quarter of 2014 for annual growth of 2.4 percent, down from 3.0 percent in the fourth quarter.
Source: http://www.centralbanknews.info/2015/06/boe-maintains-rates-stock-of-assets.html
