Daily Archives: August 8, 2012

Claire Jones

Mervyn King

Mervyn King. Image by Bloomberg.

Hello and welcome to the live blog on the Bank of England’s latest Inflation Report. 

The governor, Sir Mervyn King, will be taking questions from the press from shortly after 10.30am. 

All times are UK time. 

 

11.54 The live blog is now closed.

11.53 Here are the key takeaways:

  • The inflation forecast suggests the MPC has some easing bias, though more action is far from guaranteed.
  • If the MPC does ease, further asset purchases look more likely than cuts to Bank rate.
  • The governor’s comments indicate that the Bank is not at all pleased with the way in which the US is conducting its investigation into StanChart (see 11.30).
  • Sir Mervyn also didn’t think Draghi’s latest plan to save the euro was all that great (see 10.58).
  • The Bank is probably more upbeat on Funding for Lending than I’d originally thought. This from RBS’s Richard Barwell:

Richard Barwell: The Bank seems confident that the FLS will bring down funding costs and Paul Fisher spoke in terms of hundreds rather than tens of basis points. Obviously they cannot be sure that this will pass through one-for-one into retail rates, but relative to, say the impact of a bank rate cut, it looks pretty chunky.

11.36 Here’s the report in full along with the growth forecasts, which have — as expected — been revised down: Read more