BOE MPC: Policy On Hold; Chances of Disorderly Brexit Decreased>

-BOE MPC Voted 9-0 for Unchanged Bank Rate at Dec Meeting 

-BOE MPC Voted 9-0 for Unchanged QE Stock at Dec Meeting            

     LONDON (MNI) - The Bank of England Monetary Policy Committee voted   

unanimously to leave policy unchanged at its December meeting, stating 

that economic data since its November meeting had been limited and 

mixed, the minutes of its meeting ending December 13 showed. 

     The MPC said that progress in the first phase of talks over the UK 

leaving the European Union made a disorderly Brexit less likely, which 

should support business and consumer confidence. 

     Near term, the MPC saw signs of weakness in the fourth quarter, but 

its big picture of subdued growth with inflation drifting back towards 

the 2% target was unchanged. 

     The MPC offered no commentary on current market expectations, with 

no advice over the likelihood of a hike in coming months. Looking 

forward, however, the MPC said that future hikes in Bank Rate would be 

warranted "over the next few years" should the economy follow the path 

set out in the Bank's November Inflation Report. 

     The MPC's central projections are conditioned on the assumption 

that businesses and consumers will assume that there will not be a 

disorderly Brexit - one that sees the UK crash out without any deal with 

the EU. 

     The minutes said that developments in the Brexit talks, with 

progress to the second phase now likely, "would reduce the likelihood of 

a disorderly exit and was likely to support household and corporate 

confidence." 

     The November Budget, which eased the pace of fiscal tightening, was 

seen supporting activity. 

     It "contained some upside news for aggregate demand," the minutes 

said. 

     Bank staff estimated that it would boost GDP by around 0.3% over 

the BOE's three year forecast period and would add 0.1 point to CPI. 

     The minutes showed that the Bank believed the reaction to the MPC's 

November 25 basis point hike was subdued, with reactions in line with 

previous policy moves and that survey evidence showed that the public 

accepted the case for higher interest rates and believed that they were 

likely to rise further. 

     -London newsroom: e-mail: david.robinson@marketnews.com    

[TOPICS: M$$BE$,MT$$$$]