On the 7th and 8th of October, the Bank of England Monetary Policy Committee unanimously decided to keep both its interest rates and its quantitative easing on hold, according to the Minutes. The MPC noted that developments over the month had generally been positive, but opinions were divided over the medium-term inflation outlook. As we had expected, the Minutes only confirmed that the next serious deliberation on whether or not to expand its quantitative easing programme is expected to pop up in November, when the Quarterly Inflation Report will be available.
In October, the quarterly CBI industrial trends survey showed a significant easing in the decline in UK manufacturing output. Reported output increased from -31 to 8 in the three months to October, while new orders continued to decline, but at a slower pace (-12 from -29). Also on expectations, sentiment improved significantly with expected new orders, domestic orders, export orders and output all jumping into positive territory. The monthly survey however, showed a less optimistic picture with total orders deteriorating from -48 to -51 in October.
