The Monetary Policy Committee minutes out today report lending to households and businesses appeared more promising than the headline FLS
numbers might suggest.
Intelligence from the Bank’s agents also suggests improved credit supply has already begun to feed through to business, although it is too soon for data to reflect the upturn.
It added: “Perhaps in part as a consequence of the FLS, the housing market had continued to show some signs of thawing. On the average of the main lenders’ indices, house prices had risen by over 1% in the three months to February, compared with the previous three months.”
It said the lending picture was likely to remain “broadly flat.”
Inflation is more likely to remain above the 2% target than below it for much of the next three years, reported the BoE. The Committee’s central expectation was that wage growth would remain subdued and that productivity would pick up gently over the course of 2013.
In March, the Governor asked the Committee to vote on the proposition that bank rate should be maintained at 0.5% and asset purchase reserves should be maintained at £375bn.
The MPC voted unanimously to hold Bank Rate at 0.5%, whereas three members, the Governor, Paul Fisher and David Miles voted against the proposition, voting for another £25 billion to a total of £400 billion.