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October 08, 2015MONETARY POLICY: ENGLAND The Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 0.5% and the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.
The latest indicators show twelve-month inflation at 0.0 per cent in August, well below the 2 percent target rate, most of the gap reflects unusually low energy, food, and imported goods price inflation. Past weakness in domestic costs is also contributing to downward pressure on inflation. Unit wage costs are currently rising but lower than what would be consistent with target inflation in the medium term. In recent months, UK private final domestic demand has been resilient supported by growth in real income and productivity, supportive monetary policy, and solid business and consumer confidence. Fiscal consolidation has been a restraining influence as has global growth remaining below average rates. The Committee's view is that with low inflation and some spare capacity in economy, monetary policy will continue to be set to ensure growth is sufficient to absorb remaining underutilised resources.
Sources: Bank of England