After it looked like the Bank of England was creeping slowly toward tightening monetary policy in that country, it appears members may now be plotting the exact opposite, another round of quantitative easing, according to the latest minutes.
From Societe Generale’s Brian Hilliard:
The tone of the Committee is definitely becoming ever more dovish. In the May minutes, “Other members concluded that an increase in Bank Rate was not yet warranted.” In June, there is no implicit acknowledgement that rates might need to rise soon. Indeed, “The current weakness of demand growth was likely to persist for longer than previously thought. Moreover, the fiscal challenges in the euro-area periphery highlighted the potential for further adverse shocks to demand. For some of these members, it was possible that further asset purchases might become warranted if the downside risks to medium-term inflation materialised.”
Asset purchases mean more QE, and the shift toward that perspective means a rate hike is likely no long on the cards. As a result in this shift in mood at the BoE, SocGen have put their projection for an August rate hike on review.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.