For full and complete daily currency analysis please see:  Daily analysis -  Essential reading for currency-market professionals. 

 

August 17th 2011:  Quantitative easing debate crucial in BOE minutes

 

The Bank of England minutes from August’s  MPC meeting will be another important event, although the shape of the debate is fairly clear from the inflation report and Governor King’s letter to the Chancellor explaining why inflation was again more than twice the government’s 2% target.

The minutes will tend to be generally pessimistic on the economic outlook, but the majority of members are not likely to push for additional quantitative easing at this time. The exception will be Posen who must be feeling more confident in his position of calling for additional bond purchases

The vote split will be important and there is a strong possibility that there will be an 8-1 vote for unchanged interest rates with Dale dropping his previous preference for an increase in rates. Sterling will weaken if there is an 8-1 vote, although the damage is still likely to be contained in the very short term given that markets have priced out any increase in interest rates.

Follow breaking developments on Twitter -  @Investicafx

For a full list of market previews follow this link Market Previews