Bank of England Meeting Minutes, Retail Sales Decline 2.3% - 23.5.2012

The Bank of England at its Monetary Policy Committee voted for 8-1 to hold unchanged the asset purchase facility at 325 billion pounds as its was reported today for the Meeting Minutes on 9-10 of May. David Miles member of the Monetary Policy Committee voted for an increase of 25 billion pounds but for the benchmark interest rates the vote was unanimous to be kept unchanged at 0.5 per cent. As the growth forecasts are lowered by the Central Bank and there is renewal of the debt crisis in euro-area, BOE Governor Mervyn King at a press conference earlier this month gave some possibility of increasing the bond purchases. However BOE said inflation is above the target of 2% and will remain above for longer than anticipated also said that growth will remain weak in the near term.

Retail Sales fell more than anticipated to -2.3% from the revised 2% in the previous month as the Office of National Statistics reported today. This drop is the highest since January 2010 while the projection for Retail Sales was at 0.8% decline. The U.K’s economy is entering again in recession as the GDP latest release was negative, inflation is at 3% and therefore Consumer Spending is under pressure.