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BoE Minutes: MPC voted 6-3 to maintain QE at £375B

FXstreet.com (Barcelona) - BoE Minutes from the MPC monetary policy meeting held on 8 and 9 May and released today reveal that the Committee voted unanimously in favor of maintaining the interest rate at 0.5%.

As far as the proposition to continue with the program of asset purchases totaling £375 billion is concerned, for the second straight month six MPC members voted in favor while three voted against. The Governor Mervyn King, Paul Fisher and David Miles who voted against preferred to boost the QE program by £25 billion to a total of £400 billion.

According to the minutes, the MPC “news on the month had on balance been favourable and it was likely that the level of output at the end of Q2 would be 0.7% higher than the Committee had expected three months ago.” They emphasized however that in historical terms the growth perspectives were still unfavorable and contemplated the possibility of inflation rising again slightly and remaining above the 2% target for the next two years.

The majority of the MPC members did not consider a further increase of the asset purchase program necessary after the February expansion. The Governor Mervyn King, Paul Fisher and David Miles argued however that and another expansion of QE “would facilitate an earlier normalisation of the monetary stance when that became appropriate.”

Commodities Brief – Precious metals holding ahead of FOMC, crude eyes key support at 95.50

Gold attempted to resume the bearish wave yesterday, after capping at 1400.00 level, where it failed to hold above the 38.2% Fibonacci level for the latest bearish wave. However, Monday’s bullish engulfing candle suggest a potential rebound within the upcoming period, though due the strong downside wave, it is unclear when or if short-term upside attempts will occur today, especially with the FOMC on tap later. At the time of writing, the price of gold is now trading at USD $1383.80 per oz. Wednesday during European trading.
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