The Bank of England's Super Thursday data dump made the markets go crazy for a while.
While interest rates remained at a record low of 0.5%, analysts were expecting two or three BoE members to vote for a rate hike, which would indicate an imminent rise in 2015.
However, minutes showed that fewer Monetary Policy Committee members wanted to raise rates than analysts expected.
There was only one dissenting voice against the decision to keep rates at 0.5%. And this is what it did to the
It almost recovered all losses for the day in five minutes:
Google
The pound crashed against other major currencies on the news that the BOE may take longer to raise rates than thought.
Here is the pound dropping 0.68% against the euro, courtesy of Bloomberg:
Bloomberg
And here's the pound falling off a cliff against the US dollar, down 0.73%:
Bloomberg
The key points from Super Thursday were:
- 8 members of the MPC voted to hold the BoE's benchmark interest rate at 0.5%, 1 voted to raise it to 0.75%.
- Over the last quarter employment hasn't risen, but wages have, which is a fairly healthy development for the labour market.
- The Bank now expects 3% wage growth and a 1.25% increase in employment this year.
- Back in May, the Bank had a 2.5% wage growth and 1.75% employment growth forecast.
- Inflation will pick up a little bit more slowly because of the second slump in global oil prices recently, but should still go back to 2% in two years.
- For the months ahead inflation will hold close to zero.
- The domestic recovery is still pretty strong. The global picture for growth is solid if not particularly impressive.