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 February shows that the committee had, for a second consecutive meeting, a split vote. Eight members voted for a 50-basis rate cut, while one, Mr. Blanchflower, proposed a 100-basis point rate cut, as was the case at the January meeting.
The members of the voting committee discussed the side effects of having the Bank Rate at too low levels, something that would have a negative influence on the banking system, by reducing the bank’s profit margin, and/or impairing the monetary policy decisions.
The report shows that there was a great amount of uncertainty regarding how much the BoE should reduce the monetary policy. Except for Mr. Blanchflower, the policymakers saw the need to cut 50 basis points from the Bank Rate. According to the policy committee, inflation outlook still remains to the downside.
In addition, the MPC discussed the possibility of having the central bank intervene in the corporate bond market, which was previously mentioned. This decision should help the bank stimulate the economy outside of the conventional monetary policy, and should reduce the spread on those assets.
Forex Technical Reaction: The pound had a mixed reaction to the report. The pound initially dropped 40 pips, but then retraced the move. Before the release, the pound tumbled more than 150 pips during the European session.