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Bank of England minutes – August

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The Bank of England release the minutes from the MPC August meeting, with a surprise 7 – 2 vote on interests rates, and a 9 – 0 vote as expected on asset purchases.

Ian McCafferty and Martin Weale voted against the proposition of leave interest rates unchanged, preferring to increase Bank Rate by 25 basis points.

This is the first time that any of the MPC has dissented from Carney’s position of rates being held at 50 bps.

GBPUSD

Following yesterday’s lower than expected inflation figures (CPI/RPI) Cable weakened and trended towards the 1.6600 level during the Asian session.

The BoE minutes this morning had the effect of boosting sterling with the surprise 7 – 2 vote, thus lifting expectations of a rate rise in the shorter term. GBPUSD rallied 75 pips from session lows in a knee jerk move, but this tone faded shortly to trade back down at 1.6650 (9:45 London Time).

http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2014/mpc1408.pdf