The Bank of England kept their key interest rate unchanged at 0.25% and its asset purchase unchanged at 435bn sterling at its June meeting today. However, there were 3 members out of the eight MPC members who voted to raise the Bank Rate by 25 basis points, which pushed sterling higher by 97 pips from 1.2693 to 1.2795. (11:00 GMT). The MPC members, Forbes, McCafferty and Saunders were the dissenters.
The MPC also voted 8-0 to keep Corporate Bonds Stocks at Stg 10bn and also voted 8-0 to keep the Gilt stocks unchanged at Stg435 bn. The minutes cited that inflation overshoot could be more pronounced than previously thought while spare capacity in the economy appeared limited.
U.K. Retail Sales for May came in lower than expected at -1.2% m/m versus the median forecast of -0.9% while the previous month was a revised +2.5% from +2.3%. in April. (08:30 GMT). Sterling slid from 1.2720 to 1.2690.