- Some MPC though probability that further monetary stimulus would be needed had increased
Sterling hit hard by possibility of further QE. .
- Most members thought key risks substantial and stood ready to act in either direction
- Key risk that prolonged above target CPI would push inflation expectations higher
- 2nd key risk that demand would not grow sufficiently, cause CPI to fall well below target medium term
- One MPC member worried supply capacity could be hit if fall in H2 GDP prompted lay offs, scrapping capital
- Inflation expectations so far subdued, activity data consistent with slowdown in H2 2010
- Sentance still argued that well-communicated gradual rate rise would not destabilise confidence (he really should get out more)