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

minutes:

     -Seven MPC members voted for unchanged policy, with two, Jonathan Haskel

and Michael Saunders, voting to raise the asset purchase total by GBP100

billion.

     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

case."

     "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

18.

     -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: david.robinson@marketnews.com

[TOPICS: M$B$$$,M$E$$$,MT$$$$,MX$$$$,M$$BE$]