The Bank of England held its policy stance unchanged and the balance of voting remained at 8 to 1 in favour of the status quo, as expected. The minutes of the meeting indicates the members are confident that the poor performance of emerging economies will not affect the U.K. economy, even when accounting for expected weak EM growth and softer-than-expected activity indicators, as well as concern over unit labour costs rising more slowly than needed for a hike and a weaker inflation profile.
Overall, today's decision and minutes support their view that a Bank Rate hike is off the table in the short term and will be pushed out into at least Q2 2016, acknowledging risks to the downside in light of the above, says Barclays.
There is a clear indication that the decision will be taken based on the performance of the indicators and the Committee wants further reassurances before more members join Mr McCafferty in voting for a rate hike.
