BOE maintains rates, stock of assets, as expected

    The Bank of England (BOE) maintained its Bank Rate at 0.50 percent along with the stock of assets purchased at 375 billion pounds, as widely expected.
    In a brief statement following a meeting of its Monetary Policy Committee (MPC), the bank also said its latest inflation report would be published on Nov. 12 and minutes of today's meeting would be released on Nov. 19.
    The BOE is expected to become the first major advanced economy to raise its policy rate from essentially zero that was adopted in March 2009 when it also began purchasing assets, known as quantitative easing, to aid in the recovery after the global financial crises.
   Financial market are betting that the BOE will raise rates in early 2015 though bets have been scaled back in the last month due to weakness in the euro zone, and thus the global economy.

    Two of the nine members of the bank's MPC have already voted three times to raise rates by 25 basis points, arguing it was necessary for the bank to stay ahead of an expected increase in wages.

    But other MPC members, including Deputy Governors Ben Broadbent and John Cunliffe, have recently said there is no need to raise rates yet as there is little inflationary pressure.

    In September BOE Governor Mark Carney acknowledged that the BOE is closer to raising rates but the actual timing of a rate rise would depend on how the economy is doing and any rise in borrowing costs would likely be gradual and limited.
    Last month Carney also said the BOE would be incorporating the recent negative growth numbers from Europe and weaker global growth into its forecasts.
    Headline inflation in the United Kingdom eased to 1.2 percent in September from 1.5 percent in August while the unemployment rate declined further to 6.0 percent in the three months to August from 6.2 percent in the previous period.
    The Gross Domestic Product of the UK expanded by 0.7 percent in the third quarter of this year from the second quarter for annual growth of 3.0 percent, down from 3.2 percent.

    The BOE issued the following statement:

"The Bank of England’s Monetary Policy Committee at its meeting today voted to maintain Bank Rate at 0.5%. The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.

The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 10.30am on Wednesday 12 November.
The minutes of the meeting will be published at 9.30am on Wednesday 19 November."

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