BOE voted 8-1 in favor of forward guidance

|By:, SA News Editor

The Bank of England's Monetary Policy Committee voted 8-1 in favor of adopting forward guidance, which includes a proposal not to raise interest rates from 0.5% until unemployment has dropped to 7% from 7.8% currently, subject to conditions related to inflation and financial stability. The vote took place at a meeting earlier this month.

Martin Weale supported the adoption of forward guidance but voted against the proposition, as he would prefer a shorter-than-proposed time frame for the first inflation knockout. (If it were to be "more likely than not that CPI inflation 18-24 months ahead will be 0.5 percentage points or more above the 2% target.")

The MPC voted unanimously to keep interest rates at 0.5% and against more quantitative easing.

The pound spikes vs the dollar and is +0.2% at $1.5479. The FTSE falls further and is -0.4%.

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