The Bank of England today published the minutes of the July 8/9 meeting of the Monetary Policy Committee which showed a unanimous decision to leave the interbank rate unchanged at the 0.5 percent level it was cut to in March.
Members of the MPC noted further signs in July that the global economy was approaching a trough in activity, citing the JPMorgan Global Composite Purchasing Managers Index (PMI) having risen closer to the level consistent with no change in economic activity and the Chinese manufacturing PMIs having moved a little further into expansionary territory.
Nevertheless, the global outlook remained extremely uncertain.
In the UK, survey indicators of more recent developments were encouraging. In particular, the CIPS/Markit surveys for manufacturing and services had reached levels in June consistent with output having stabilised, the MPC noted. Recent official data pointed to some stabilisation in output.
The weakness of bank lending continued to hang over the prospects for recovery.
The MPC voted to keep the bank rate unchanged and that the BoE should continue with the programme, as announced following its May 7 meeting, of asset purchases totalling £125 billion financed by the creation of central bank reserves.
The MPC noted at the meeting that the BoE would purchase the assets to meet the £125 billion target at a slower rate over the next month than it had under the programme so far, and that the purchases would continue up until the next policy meeting in August.
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