MPC unanimous on interest rate decision

Nia Williams

October 23, 2013

The minutes to October’s meeting show that before turning to its immediate policy decision, the Committee discussed financial market developments; the international economy; money, credit, demand and output; and supply, costs and prices.

The Governor then invited the Committee to vote on the propositions that:

 Bank Rate should be maintained at 0.5%;

 The Bank of England should maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.

The Committee voted unanimously in favour of the Bank Rate proposition and the stock of asset purchases.

The minutes state: “All Committee members agreed that neither of the price stability knockout conditions that would override the forward guidance provided in August had been breached; and the FPC had agreed that the financial stability knockout had not been breached.

“With unemployment remaining above the 7% threshold, the Committee’s forward guidance therefore remained in place and no MPC member thought it appropriate to tighten the stance of monetary policy at the current juncture.

“Market rates had fallen back over the month and output appeared to be expanding at least as fast as expected at the time of the August Inflation Report. All members therefore agreed that there was currently little case for increasing the degree of monetary stimulus further.”

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