BoE voted unanimously to keep Bank Rate unchanged at 0.10%. However, it voted 7-2 to keep the government bond purchase target at GBP 895B. Dave Ramsden and Michael Saunders voted to lower purchase target to GBP 860B.
In the statement, it said that since August meeting, “the pace of recovery of global activity has showed signs of slowing”, “global inflationary pressures have remained strong”, and “there are some signs that cost pressures may prove more persistent”.
BoE reiterated that “some modest tightening of monetary policy over the forecast period was likely to be necessary”. Developments since August “appear to have strengthened that case”.
“The Committee will be monitoring closely the incoming evidence regarding developments in the labour market, and particularly unemployment, wider measures of slack and underlying pay pressures; the extent to which businesses pass on wage and other cost increases, as well as medium-term inflation expectations.”