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SHOTLIST: LONDON. 7 AUGUST 2013. SOURCE: AFPTV -VAR of Mark Carney entering SOUNDBITE 1 Mark Carney (man) Head of the Bank of England (English,22 secs): "A renewed recovery is now underway in the United Kingdom, and it appears to be broadening. While that is certainly welcome, the legacy of the financial crisis means that the recovery remains weak by historical standards, and there is still a significant margin of spare capacity in the economy. This is most clearly evident in the high rate of unemployment." SOUNDBITE 2 Mark Carney (man) Head of the Bank of England (English,31 secs): It is now more important than ever for the Monetary Policy Committee (MPC) to be clear and transparent about how it will set monetary policy in order to avoid an unwarranted tightening in interest rate expectations as the recovery gathers strength. That is why the MPC is today announcing explicit state-contingent forward guidance. Our aim is to help secure the recovery, while ensuring that risks to price stability and financial stability are well contained. /// ---------------------------------------------------------- AFP TEXT STORY: Britain-bank-money-BoE,lead New Bank of England chief steers from stimulus by Roland JACKSON ATTENTION - RECASTS, UPDATES with reax and unemployment data, ADDS background /// LONDON, July 17, 2013 (AFP) - The Bank of England's new governor Mark Carney united policymakers in a recent decision that saw it refrain from more stimulus, minutes from his first meeting showed Wednesday. The central bank's Monetary Policy Committee voted 9-0 to keep its quantitative easing (QE) bond-buying stimulus scheme at £375 billion ($570 billion, 433 billion euros), according to minutes from the gathering held at the start of July. In a statement published immediately following the July 3-4 gathering, the BoE had simply announced that the QE amount had been maintained along with its key interest rate, which remained at a record-low 0.50 percent. Carney also used the post-meeting statement to issue unusual guidance, taking markets by surprise by stating that the BoE was unlikely to lift record-low borrowing costs any time soon. But Wednesday's minutes provided more detail about Canadian national Carney's first meeting after replacing the retiring Mervyn King. The minutes on Wednesday revealed policymakers' voting pattern, which also left traders surprised. Both the London stock market and British pound rose on Wednesday in reaction to the minutes' detail that revealed unanimous voting patterns for both the QE and rate decisions. Markets have taken them "as a sign of intent from Carney and a clean break from Mervyn King, and shows the influence he has already had", said analyst Michael Hewson at traders CMC Markets UK. In the five meetings prior to Carney's first, King had voted for £25 billion of fresh cash to bolster Britain's economic growth. However King and two other policymakers who had also called for more stimulus, were on each occasion out-voted by a margin of 6-3. Kathleen Brooks of trading site Forex.com said Carney had united the panel for the first time since June 2011. "The biggest surprise in the minutes was that Paul Fisher and David Miles both changed their stance and decided not to vote for more QE. This is a big shift," Brooks added. --- BoE to wait and see --- The minutes also showed that while some policymakers felt that the economy still needed more QE at some point, they were prepared to wait and see the extent of Britain's economic recovery. The MPC added in the minutes that it would be studying other ways of helping to stimulate fragile economic growth. "For most members, the current policy setting was appropriate and the onus on policy at this juncture was to reinforce the recovery by ensuring that stimulus was not withdrawn prematurely," the minutes read. The economic outlook that motivates these decisions brightened on Wednesday as official data showed Britain's number of unemployed people dipped to 2.505 million in the three months to the end of May. The BoE carries out monetary policy to try and keep Britain's annual inflation rate close to a 2.0-percent target set by the government. But data released Tuesday showed that it had hit a 14-month peak of 2.9 percent in June, partly owing to high petrol prices. Under King, the BoE slashed its main lending rate to 0.50 percent, a record-low level for the central bank and where it has stood since March 2009. Also since that time, it has pumped out £375 billion of new cash into the economy under quantitative easing. Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of increasing lending by retail banks to boost economic activity.
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