Pound Jumps After BoE Minutes Released
The pound leapt to it's highest level against the dollar in more than a month after the release of the minutes of the BoE's MPC meeting on October 7 and 8. It also rose to it's best against the euro since September 24.
The minutes showed that all the members of the MPC voted unanimously to keep interest rates on hold at 0.5% (no surprises there), but more crucially to hold the level of QE at GBP 175 billion.
There were no votes for increasing QE at this stage, as some had been expecting, although there were some differences of opinion on the medium-term outlook for inflation, and how to control it.
The pound climbed close to 1.11 against the euro and hit 1.6570 against the dollar shortly after the news.
Sterling was already in fairly buoyant mood after BoE Governor Mervyn King's comments on the news last night that consumers should expect higher interest rates at some point in the future.
That's hardly rocket science is it Merv? Interest rates will move higher from 0.5% at some unspecified time in the future, cheers. Any other pearls? Interest rates won't go much lower maybe? Or the weather is going to get worse before it gets better?
It does surprise me how stating, as Basil Fawlty would call it, "the bleeding obvious" is capable of moving the market substantially.
Also on the news last night were comments from Merv that the banks should be "split up" to stop them becoming to complacent. That whatever cock-ups they might make in the future they'd get bailed out again, as they are too important to fail.
Can't fault the reasoning on that one.
Under the plan HSBC would be split into four components: H for home loans; S for securities; B for banking; C for crap. Simple.
The minutes showed that all the members of the MPC voted unanimously to keep interest rates on hold at 0.5% (no surprises there), but more crucially to hold the level of QE at GBP 175 billion.
There were no votes for increasing QE at this stage, as some had been expecting, although there were some differences of opinion on the medium-term outlook for inflation, and how to control it.
The pound climbed close to 1.11 against the euro and hit 1.6570 against the dollar shortly after the news.
Sterling was already in fairly buoyant mood after BoE Governor Mervyn King's comments on the news last night that consumers should expect higher interest rates at some point in the future.
That's hardly rocket science is it Merv? Interest rates will move higher from 0.5% at some unspecified time in the future, cheers. Any other pearls? Interest rates won't go much lower maybe? Or the weather is going to get worse before it gets better?
It does surprise me how stating, as Basil Fawlty would call it, "the bleeding obvious" is capable of moving the market substantially.
Also on the news last night were comments from Merv that the banks should be "split up" to stop them becoming to complacent. That whatever cock-ups they might make in the future they'd get bailed out again, as they are too important to fail.
Can't fault the reasoning on that one.
Under the plan HSBC would be split into four components: H for home loans; S for securities; B for banking; C for crap. Simple.