FXstreet.com (Barcelona) - The decision of cutting Bank Rate by 25 b.p. to 5.25, taken in the Monetary Policy Meeting held in the 6th and 7th of February, was approved by 8 votes to one, with David Blanchflower the only vote against the decision defended a 50 basis points rate cut.
The Bank sees financial markets still in a stressed scenario, with pressure on bank's balance sheets intensifying, and international equity markets falling sharply in the past month weighed by further news about bank write-downs and the monoline downgrades as
well as weaker data from US economy.
On the US economy, the Bank underlines the weak data coming from that country, with GDP growing at a sharply slower pace in the fourth quarter and services activity as well as employment showing disappointing figures, plus the long lasting housing slump.
In the European Union, despite the lack of such clear indicators, growth seems to started weakening, with a decline in consumption.
In the UK, recent data does not show clear reasons for concern, according to the Bank, with GDP growing around 0.6% in the 4Q and the Industrial activity consistent with stronger 4Q growth, although the Bank notes that forward -looking indicators are showing data consistent with a slow-down in activity. Furthermore, consumption seems to have eased, same accounts for the housing market.