The last month MPC Statements important points are:
- Committee has targeted 2% Inflation rate, 7% unemployment rate
- Committee continues Asset Purchase Facility at $375 billion Pound
- Unemployment rate in December read 7.3% lower than prior 7.6% in November, which is above 7% target level.
- CPI in December read 2.1% lower than prior 2.2% in November, which is above 2% target level.
- CAD has been doubled over past 2 years and could have been around 3.5% of GDP in Q3.
- Committee decided not to lower interest rate below 0.5% in order to reduce its stock of assets purchase till unemployment rate goes below 7%.
- Inflation rate is near to target level at 2% and Unemployment rate is above target level at 7%.
- As BOE has already decided not to go for tapering till unemployment rate is below 7%, so we expect stand still in todays meeting.
- We expect that MPC may start reducing asset purchase by mid of 2014, which will help GBP in long run.