- Voted 8-1 to keep QE total at £325 bln
- Miles made “finely balanced” call for £350 bln
- Short-run path for CPI likely higher than in February forecasts, “greater chance” above-target CPI will persist in medium term (Tucker had already given the game away)
- Weak ONS construction data and Jubilee holiday mean ONS could report UK GDP falls in Q1 and Q2
- But sharp falls in construction output “perplexing”, MPC minded to focus on survey indicators
- Surveys point to moderate growth in H1 2012, likely to have picked up from H2 2011
- Risk that high inflation may persist and that MPC commitment to inflation target might be called into question
- Oil and commodity price shocks, corporate profit margins and weak productivity pose upward CPI risk
- Downside risk to CPI from potential damage to household and business confidence if ONS reports further GDP falls
- Global recovery proceeding broadly as expected, but markets’ euro zone concerns greater if anything
Quess no further QE anytime soon in the UK. Posen ends call for further QE.