Details of the Bank of England MPC monetary policy meeting for May
- Prior 9-0
Details from the minutes;
- Two members finely balanced on whether to hold or raise rates (usual suspects)
- All members agreed rates more likely than not to go up over 3 year period
- Noted that market brought forward hike expectations after release of April minutes
- Inflation close to zero is unlikely to last long and they expect a notable pickup towards end of 2015
- UK house prices rose faster than expected. RICS data points to upside risk to prices in second half of year
The pound has found a bid on the minutes and more on the fact that the views remains the same rather than there being anything dovish. The house price comment could be construed hawkishly if the market thinks that the BOE will move to counter another take off in prices. GBPUSD popped to 1.5536 from 1.5470
Just reading through the minutes there's some other comments worth noting
- Unemployment could fall faster than expected in the May inflation report leading to faster wage growth
- Lower inflation could be holding back wages and therefore restrain wage growth
- Slack in economy is likely to be absorbed in the next 12 months
- Net exports projected to detract slightly from growth
- Expects Q1 GDP to be revised up
- Q2 GDP will pick up towards historical averages
Most of the rest is the usual stuff that rates will stay low and rise more gradually than previous cycles
The full minutes are here