Key highlights from BOE monetary policy and minutes

Bank of England's monetary policy committee (MPC) chose to keep monetary policy steady for 6 years and 8 months with interest rates at record low 0.5%.

Last time policy rate was changed dates back in February 2009, when it was cut to record low of 0.5%, by then governor Sir Mervin King.

Key highlights -

• MPC members voted 8/1 in favor of keeping policy steady, in line with broader market expectations. MPC member Ian McCafferty remained the sole dissenter, voting in favor of 0.25% rate hike.
• Subsequent monetary tightening will be modest and rates are likely to remain low by historical standards for years to come.
• Downside risks to world activity has increased, not yet translate into materially weaker outlook for UK domestic economy- according to majority of the members.
• Against its previous expectation that inflation will turn up at turn of the year, it now expects prices to grow only 1% by next spring. Though MPC believes it is effect of weaker global demand and lower oil price.
• According to McCafferty, early rate hike would provide room for more gradual rise. He expects rising wages would at one point, overcome the dampening effect of stronger sterling
• Domestic expansion has somewhat weakened.
• According to BOE members, domestic momentum is being underpinned by robust real income growth, supportive credit conditions, and elevated business and consumer confidence.
• BOE feels current rate of rise won't be sufficient enough to push inflation towards committee's 2% objective.

Pound is down from 1.537 to 1531 against Dollar, as BOE sounded more subdued over outlook than previous.