The Pound has remained stable following the release of July’s Bank of England Monetary Policy Committee (MPC) minutes, trading at 1.13 against the Euro and at 1.61 against the US Dollar on the interbank market.
The minutes showed that the MPC remains split, with 7 members voting to keep interest rates unchanged at 0.50% whilst 2 members, Mr Spencer Dale and Dr Martin Weale called for a 0.25% hike. Dr Adam Posen remains the most dovish member of the MPC calling for a £50bn increase to the Bank’s £200bn Quantitative Easing Asset Purchase Programme. Most MPC members admitted that recent events had reduced the likelihood of any near term tightening to monetary policy. However, thankfully for Sterling, the majority of MPC members made no explicit reference to further Quantitative Easing.
The market will now focus on the ongoing European Sovereign debt crisis and the European Finance Ministers meeting and the continuing negotiations in the US Congress to increase the US debt ceiling.