BoE Holds Rates Market to Await Minutes on Aug 20

The Bank of England has held UK interest rates at a record low of 0.5% for another month.

The size of the Bank’s economic stimulus programme – quantitative easing – was also unchanged at £375bn.

Debate over the timing of a rate rise has intensified, with Bank governor Mark Carney hinting recently that it could come by the end of this year.

Details of why the Bank’s Monetary Policy Committee (MPC) held rates will be published later this month.

In the minutes of the previous MPC meeting in July, all nine members of the committee voted to keep rates on hold.

Policymakers noted that while “employment had continued to increase robustly… wage growth had been surprisingly weak”. There was also concern about weakening economic growth overseas.

The minutes for the latest MPC meeting are not due to be released until 20 August. If they reveal that some policymakers voted in favour of a rate rise it will be the first time the committee has been split since July 2011.

UK interest rates have been at 0.5% for five years. However, in June, Mr Carney said that interest rates could start to rise sooner than financial markets expected.

Most commentators had forecast that the first rate increase would come early next year.

via SOURCE

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza