Bank of England Minutes, Labor Statistics Support the Pound - 18.4.2012

The Bank of England published today the minutes of its April 5 meeting, when officials kept the official Bank Rate paid on commercial bank reserves at 0.5% and continued with the programme of asset purchases totalling 325 billion pounds financed by the issuance of central bank reserves. According to the minutes, the Monetary Policy Committee noted some “downside news on the near-term path of GDP” contrasted by “upside news on the near-term path for inflation”. A drop in inflation at the beginning of the year “had been welcome but had been slightly less than the Committee had expected”, the minutes said, but “for most members, there was no sufficient reason to change monetary policy”. However, yesterday the Office for National Statistics of the UK reported that CPI annual inflation rose in March to 3.5%, compared with 3.4% in February and the central bank’s 2% target. The British pound gained ground against the US dollar after December 2011 – February 2012 labor market statistics has been issued. The report showed the employment rate for those aged from 16 to 64 rose by 0.1% to 70.4% on quarterly basis, while the unemployment rate decreased by 0.1% to 8.3% of the economically active population. The number of jobless claims increased in March, but less than predicted. The pound therefore extended gains of the previous two days, currently targeting at 1.6000, compared with Monday’s low at 1.5818.