The former president lashes out at his political opponents, calling them the 'enemy within'
Sterling rose after the minutes from the Nov. 3-4 Monetary Policy Committee meeting, published on Wednesday, boosted expectations that high inflation would stop the BoE following the US Federal Reserve in injecting more stimulus into the economy.
There had been speculation among analysts that one or more members of the committee would join the call for a second round of quantitative easing.
‘The BoE is agnostic on whether it will tighten or loosen and it depends on how the data evolve,’ said Alan Clarke, an economist at BNP Paribas.
Seven members of the nine-strong MPC voted to keep interest rates at a record low of 0.5 percent and maintain the central bank’s 200 billion pound quantitative easing programme.
Andrew Sentance repeated his call for a quarter-point rate hike and Adam Posen argued that the economy needed 50 billion pounds’ more QE to alleviate the downside risks from the government’s austerity drive.
But the majority felt not enough had changed since their October meeting and the right action was ‘to maintain the current highly expansionary stance of monetary policy’.
‘They had differing views on the precise balance of risks to inflation in the medium term, but stood ready to adjust policy in either direction as necessary,’ the minutes said.
There were signs that some members were becoming more worried recent high inflation outturns — the CPI rate hit a four month high in October — could filter through to higher inflation expectations.
But for now, most members felt it would be premature to tighten policy while a lot of spare capacity remained and medium term inflation expectations remained anchored.
It would also be premature, they argued, to loosen policy without clearer signs the economy was growing ‘too slowly to use up the margin of spare capacity’ when inflation was so high.
Separately, official figures showed an unexpected fall in the number of Britons claiming jobless benefits in October, suggesting the labour market is in slightly better shape than many had feared.
The former president lashes out at his political opponents, calling them the 'enemy within'
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