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MNI REVIEW: BOE Holds Fire, Stands Ready To Add To QE

-BOE MPC Leaves QE Unchanged, Says Ready To Act If Needed
-BOE Head Bailey Stresses QE Programme Won't Expire
-Bailey Says Bank Not Doing Yield Curve Control
By David Robinson
     LONDON (MNI) - The Bank of England Monetary Policy Committee left its asset
GBP645 billion purchase target unchanged, with members split over its May
decision, but Governor Andrew Bailey stressed that the committee stood ready to
increase quantitative easing if needed and suggested that it could do so at next
month's meeting.
     The following are key points from the press conference, policy decision and
     -Seven MPC members voted for unchanged policy, with two, Jonathan Haskel
and Michael Saunders, voting to raise the asset purchase total by GBP100
     At the current pace, asset purchases would not go beyond early July, Bailey
said, but he noted that the MPC would meet again next month and had time to act.
The governor said that it was overstating things "to say there is a bunch of us
who will never do any more (QE) and a couple of people who will. That is not the
     "We have got another MPC meeting prior to getting anywhere near the
completion of this programme .. and there is clearly a commitment and
determination to take action should we need to."
     The next scheduled MPC meeting will end with a policy announcement on June
     -Bailey summed up debate on the MPC as one over whether "we should signal
something now or should we wait to see what evolves" particularly with regards
to the coronavirus lockdown, with an announcement on the framework for easing
that expected shortly.
     -Asked about the contrast between the BOE's actions and those of other
central banks such as the U.S. Federal Reserve and the European Central Bank, he
said it was a mistake to play up any differences. All MPC members were prepared
to act if there were signs of renewed market dysfunction.
     -The governor rejected the suggestion that the MPC was carrying out a form
of implicit yield curve control, saying, in response to an MNI question, that it
"is not Bank of England policy. If that was the MPC's policy you would see it in
the minutes, you would see it in the market policy report, you would see it in
the statements. We are not doing that."
     He added that "Obviously there are consequences to the yield curve of what
we do, but we are not targeting it."
--MNI London Bureau; tel: +44 203-586-2223; email:
[TOPICS: M$B$$$,M$E$$$,MT$$$$,MX$$$$,M$$BE$]

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