April MPC meeting minutes in summary | EEF

April MPC meeting minutes in summary

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The decision

On April 9th all nine members of the Monetary Policy Committee voted to maintain the Bank rate at 0.5% and the stock of purchased assets at £375 billion.

The key factors influencing the decision

The key considerations that MPC members took into account in making their decision to hold their stance on monetary policy in the UK.

The Global Outlook

  • Overall little change in the outlook for global activity.
  • Recovery in advanced economies appears to be strengthening.
  • Emerging economies have seen their recoveries slow somewhat.
  • Weak data from China highlights downside risks for global demand and activity.
  • Inflationary pressures around the world have been subdued, especially in the Euro area, where there are risks of very low inflation impacting rebalancing.

Financial markets

  • Asset price volatility has been surprisingly low but may increase as advanced economies return to a more normal setting.
  • Monetary conditions tightened somewhat over the month.
  • Sterling effective exchange rate changed little in March

Domestic market

  • Overall momentum seen to be building
  • Some signs of rebalancing towards investment
  • Surveys and activity indicators point to strong quarterly growth in 2014q1
  • Confidence – both business and consumer – improved as have credit conditions.
  • Downside risks in subdued trade and widening of the current account deficit.
  • Housing market indicators were a little weaker.

Prices and costs

  • Employment was still above the 7% threshold set out in the MPC's guidance in Aug 2013, but growth had slowed.
  • Productivity growth thought likely to have started to rise after years of stagnation.
  • Nominal wage growth was up somewhat.
  • The impact of wage growth on cost pressures will depend on the interaction between productivity and changing wages, and could go either way.
  • Committee members had a range of views the outlook for inflation in the medium term.

Knockout conditions

  • All members agreed the price stability conditions had not been breached.
  • All members agreed that the likelihood of inflation being high was low.
  • The Financial Policy Committee considered UK monetary policy did not pose a significant threat to financial stability.


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