By David Schutz, THE TAKEAWAY: BOE interest vote unanimous; QE vote 7-2 -> members see “moderate” growth , warn of short term inflation risks -> Cable sells off after minutes release A majority of Bank of England board members saw “no reason” to change the central bank’s benchmark interest rate and current quantitative easing program, the BOE minutes revealed today. Board members voted unanimously to keep rates at ultralow levels, while two members supported increasing quantitative easing but were outvoted in a 7-2 vote. Dovish board members Miles and Posen argued that more is needed to maintain the economy's supply capacity, but the majority of BOE members said they believed increased quantitative easing would send a message that the economy is worse than it actually is. The minutes on the whole pointed to a relatively unchanged picture as the BOE attempts to juggle lagging growth with inflation risks. The central bank said that recent economic data reveal a “moderate” growth increase in the UK, as the economy begins to turn around after experiencing a massive stunt in growth over the past three years. The BOE said that it sees inflation easing to manageable levels in the coming years; however the central bank referenced “substantial, clear” inflation risks in the short term as political tensions continue to boost oil prices and erode consumer confidence. The pound sold off on the news that some BOE members believed further QE was necessary. Cable erased gains made earlier in today’s session , and poor public debt data released with the BOE minutes was also seen eroding confidence in the pound.
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