Release Explanation: It is a detailed record of the BOE MPC's most recent meeting, providing in-depth insights into the economic conditions that influenced their vote on where to set interest rates.
Trade Desk Thoughts: The BoE’s minutes from the meeting held at the beginning of March shows that the committee had voted unanimously to reduce the Bank Rate by 50 basis points. Additionally, the Committee also voted unanimously that the BoE should use up to 75 billion pounds over the next three months to buy corporate debt and U.K. gilts.
The Committee saw the need to use the asset purchase program to make up for a shortfall in nominal spending. As such, the bank decided to use 75 billion pounds, after it weighed the risk of the uncertainty over the exact impact on nominal spending and inflation, and the risk of undershooting the inflation target. The members of the voting committee said they will do whatever it takes to boost nominal spending and reach the inflation target over the medium term.
Unlike in the past meetings, the voting members agreed on the size of the rate cut, 50 basis points. From the March meeting, the bank would pay 0% interest rate on bank’s deposits held at the central bank, while at the same time it would allow the Bank Rate to trade on a daily basis between 0% and 0.50%.
Forex Technical Reaction: The pound plunged 60 pips initially after the release, but recovered almost every pip lost in the following minutes. Since the new trading day started, the pound has lost 150 pips.