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 7 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- according to majority of the members.
• In spite of uncertainty over path of inflation, BOE is expecting it to pick up at turn of the year.
• According to McCafferty, early rate hike would provide room for more gradual rise.
• Domestic expansion remains healthy.
• According to BOE members, domestic momentum is being underpinned by robust real income growth, supportive credit conditions, and elevated business and consumer confidence.

Pound benefited early from upbeat BOE tone to trade as high as 1.5449 against Dollar, before wiping the gains to hover around 1.54.

It seems, some in the market are not too convinced over BOE's cheerful vision.