The Bank of England’s nine-member rate-setting body in April once again decided unanimously to leave the interest rate and the size of asset purchases unchanged as policymakers took note of a strengthening in the euro area economic activity and the prospect of UK inflation turning negative in coming months.
“All Committee members agreed that it was appropriate to leave the stance of monetary policy unchanged at this meeting, although two members regarded this month’s decision as finely balanced,” the minutes of the April 8-9 meeting said Wednesday.
“There was a range of views over the most likely future path of Bank Rate, but all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period.”
The impact of a stronger sterling was feeding through more quickly into the consumer price index than expected, implying less downward pressure on prices in coming months and a faster pickup in inflation once the effects of recent falls in energy and food prices drop out of the annual comparison, the minutes said.
Policymakers also said a further pickup in wage inflation was necessary for labor cost growth to be consistent with meeting the target in the medium term.
While acknowledging the signs of strengthening in the euro area, policymakers said any disorderly outcome from a failure to reach agreement on a new Greek programme remained a risk.
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