Rolling coverage of the latest economic and financial news
Today’s decision isn’t expected to be unanimous; indeed, it could be another 5-4 vote.
That’s because the Bank’s monetary policy committee consists of four dovish committee members who worry about the weaker jobs market and slowing wage growth, and four hawks concerned about supply-side constraints in the economy and inflation persistence, plus likely swing voter Andrew Bailey.
Stuck in the middle of it all is Governor Andrew Bailey. He sits between those two camps and almost certainly holds the deciding vote this week. Crucially, though, he wrote in the November meeting minutes that he has more sympathy with the doves.
It sounded like he was edging towards voting for a cut last month, but wanted more evidence that inflation was coming down. On the basis that inflation has largely come in line with the Bank’s forecasts since then, and if anything a tad below, we suspect he will favour a cut this week. That sets up a 5-4 vote in favour of lowering rates to 3.75%.
Continue reading…Rolling coverage of the latest economic and financial newsUK inflation falls sharply to 3.2% amid slowdown in food price risesToday’s decision isn’t expected to be unanimous; indeed, it could be another 5-4 vote.That’s because the Bank’s monetary policy committee consists of four dovish committee members who worry about the weaker jobs market and slowing wage growth, and four hawks concerned about supply-side constraints in the economy and inflation persistence, plus likely swing voter Andrew Bailey.Stuck in the middle of it all is Governor Andrew Bailey. He sits between those two camps and almost certainly holds the deciding vote this week. Crucially, though, he wrote in the November meeting minutes that he has more sympathy with the doves.It sounded like he was edging towards voting for a cut last month, but wanted more evidence that inflation was coming down. On the basis that inflation has largely come in line with the Bank’s forecasts since then, and if anything a tad below, we suspect he will favour a cut this week. That sets up a 5-4 vote in favour of lowering rates to 3.75%. Continue reading…