February UK MPC Minutes-slightly dovish than expected

The Bank of England delivered more dovish signals than expected at today's "Super Thursday". The central bank said its policy committee members voted 9-0 to keep interest rates on hold . The BoE also released quarterly inflation report simultaneously, meanwhile the BOE cut its economic forecasts broadly due to global economic growth concerns

The MPC minutes stated that "There continued to be a spread of views among members about the outlook for activity and inflation, in particular regarding: how responsive wage settlements would be to the fall in unemployment and the prospective increase in CPI inflation; the impact of exchange rate movements; and on the degree to which companies would seek to increase margins through raising prices."

The central bank said interest rates would be gradually increased over the next three years, but its in no hurry to do so following US Federal Reserve which raised its interest rate in December.

As anticipated the BoE revised its growth forecast downwards compared to the November forecast, mainly due to weaker global outlook. The GDP growth was lowered to 2.2% from 2.5% in 2016 and to 2.4% from 2.7% in 2017. The risk to the forecast is on the downside. However, the underlying fundamentals of the UK economy remain decent. The labour market continues to improve, while the economic activity is holding up, according to the BoE.

"The BoE is not in a hurry to hike rates. Our forecast is that the BoE will start hiking rates in Q3 2016,"said Nordea Bank in a research report.