In meeting minutes from a policy-makers' meeting held March 9-10, the bank repeated its assertion that reduced consumer spending in the fourth quarter, when the gross domestic product dropped 0.6 percent, was in part due to a "weather-related weakness in December."
"Nominal spending had continued to grow robustly in 2010 Q4, despite the impact of the bad weather," the bank said.
In addition, the BOE said a spike in the trade deficit "was in a very large part because of an unusually large contribution from imports of aircraft that was highly unlikely to persist."
"The monthly trade data for January had been reasonably encouraging," the BOE minutes said.
Recent data on spending, however, did not sound encouraging, the bank said. The minutes say consumer confidence "had fallen sharply since the turn of the year" and data suggests "consumer demand had weakened during the second half of January and early February."
The central bank noted oil prices represented a question mark. "It was possible that the oil price spike would prove temporary," the minutes said. On the other hand, the bank said, "Information from financial options prices had indicated increased concern that oil price might move sharply higher, particularly in the near term."
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