The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.
Nothing surprising here. I expect the BOE will behave itself until the Liberal Democrats/Tories can reach a power-sharing coalition. Though, I am surprised to see the committee continue the £200 billion asset purchasing program, considering the FED ended a similar but much larger program at the end of March. I will have to synthesize the minutes before I make a judgement on this data.
However, I maintain bearish sentiment on the U.K. economy. Britain must work out the above stated political uncertainty soon in order to deal with their gluttonous budget deficit which stands at -12.8% of GDP . Additionally, Inflation remains high at 3.4%. Someone will be held accountable for these numbers when the dust from the PM election settles.
Be sure to check out Alex's post on the election results below. Here
Sources:
- estimates taken from the economist and Office for National Statistics
- Bank of England Publication
Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
E-mail: ambrus.anlzgroup@gmail.com
Thanks for the correction.
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