The BoE voted 7-1-1 to keep rates unchanged for a second meeting in a row. Tim Besley continues to push for a rate hike, while perennial dove David Blanchflower called for easing.
The BoE voted 7-1-1 to keep rates unchanged for a second meeting in a row. Tim Besley continues to push for a rate hike, while perennial dove David Blanchflower called for easing. The majority chose to stand pat as a rate hike would have risked hurting confidence and a rate cut would increase the risk of keeping inflation elevated. Although the central bank continues to maintain that a rate increase would “material undershoot” CPI, and that wage growth has remained subdued. Tim Besley argued that a rate hike would be a prudent pre-emptive move which would anchor inflation for the long-term. Yet, the MPC recognized that the growth outlook has worsened in the past month. The pound remained unchanged after initial volatility as the balanced statement didn’t point to a clear direction. – John Rivera, Currency Analyst