Wednesday, September 22, 2010
Lone wolf on the MPC
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

As expected, the Bank of England's monetary policy committee voted 8-1 to leave Bank rate on hold at 0.5% and maintain the existing 200 billion of quantitative easing. Andrew Sentance was the lone wolf voting for a rate hike.

The hint of further easing was not as strong as provided by the Federal Reserve on September 21, but it was there. This is the key passage: "On balance, most members thought that the current level of Bank Rate and stock of asset purchases financed by the issuance of central bank reserves remained appropriate to balance the risks to the inflation outlook in the medium term. But both key risks were substantial, and these members stood ready to respond in either direction as the balance of risks evolved. For some of those members, the probability that further action would become necessary to stimulate the economy and keep inflation on track to hit the target in the medium term had increased."

The minutes are here.