Submitted by: Submitted by marga
Views: 344
Words: 3916
Pages: 16
Category: Business and Industry
Date Submitted: 03/20/2011 03:49 AM
Publication date: 20 October 2010
MINUTES OF THE
MONETARY POLICY COMMITTEE MEETING
6 AND 7 OCTOBER 2010
These are the minutes of the Monetary Policy Committee meeting held on 6 and 7 October 2010.
They are also available on the Internet http://www.bankofengland.co.uk/publications/minutes/mpc/pdf/2010/mpc1010.pdf
The Bank of England Act 1998 gives the Bank of England operational responsibility for setting interest rates to meet the Government’s inflation target. Operational decisions are taken by the Bank’s Monetary Policy Committee. The Committee meets on a regular monthly basis and minutes of its meetings are released on the Wednesday of the second week after the meeting takes place. Accordingly, the minutes of the Committee meeting to be held on 3 and 4 November will be published on 17 November 2010.
MINUTES OF THE MONETARY POLICY COMMITTEE MEETING HELD ON 6 AND 7 OCTOBER 2010
1 Before turning to its immediate policy decision, the Committee discussed financial market
developments; the international economy; money, credit, demand and output; and supply, costs and prices.
Financial markets
2
Having declined markedly in recent months, short and longer-term interest rates had been little
changed since the previous MPC meeting, so that they remained close to historic lows. There were several possible explanations for the recent reduction in government bond yields: market expectations of additional asset purchases by central banks; a belief that policy rates would remain low for an extended period; heightened aversion to risk; and a prospective shortfall in global investment relative to desired saving. It seemed likely that all of these explanations had at their heart the prospect of softer growth in parts of the world economy than previously anticipated by market participants, and the authorities’ possible reaction to it. So the impact of those supportive asset price movements needed to be set alongside the likely evolution of the...