Amid Warnings of EZ Contraction, BoE Interest, Asset Purchase Votes Unanimous
THE TAKEAWAY: BoE Minutes show unanimity -> BoE: Inflation likely to drop as recession kicks in -> Cable stays strong against the Buck following minutes release…
The Bank of England voted unanimously to keep current interest rates at 0.5% while maintaining its current asset purchase target at 275 billion pounds, according BoE Minutes released today.
The Minutes further revealed the BoE does not see inflation as a significant threat over the coming months, although some members differed on the immediacy of the threat. Moreover, the BoE warned that contraction in the Eurozone has now begun. Some members referenced the possibility of further quantitative easing measures in the future. In September, the BoE expanded its asset purchase program by 75 billion pounds.
Cable was strong on the day as of this report, in large part due to a renewed bout of risk appetite and pre-year end profit taking. The BoE minutes failed to produce significant market movement.
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