Sterling fell in morning London trade today after the BoE minutes of the July meeting revealed that two members of the MPC voted against increasing asset purchases putting the prospect of further QE in doubt. Chief Economist Spencer Dale and Ben Broadbent, dissented on the issue of 50 Billion GBP of additional QE voting for unchanged policy.

The majority of members noted that, “On balance, and in light of the potential stimulus provided by the other recent and prospective policy initiatives, these members judged that an additional Stg50 billion of asset purchases was appropriate at this meeting.” However, Messrs. Broadbent and Dale disagreed stating that risk of inflation remained a threat while noting that current policy initiatives were sufficient to provide stimulus to the UK economy.

Both Mr. Broadbent and Mr. Dale may moderate their views in light of yesterday’s weak CPI data which showed that inflation pressures have eased to their lowest level in more than two years. Nevertheless, their hawkish stance has introduced an element of doubt as to whether the BOE will ease further for the rest of this year. The news pulled cable lower by 25 points to 1.5625 in generally quiet European trade marked by very tight ranges amongst the majors.

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