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MPC voting split: can we expect an overwhelming majority?
When the MPC last met in December, three members of the committee voted for an interest rate cut: Swati Dhingra, Dave Ramsden and Alan Taylor.
Dhingra has become known for her dovish stance, voting to reduce rates at the past eight meetings.
Similarly, Taylor (who joined the MPC in September) has warned that a weakening economy calls for a “more accelerated pace of rate cuts”.
It seems reasonable to assume that these three will stick to their previous voting pattern this time around. Some additional committee members will probably come on board too, given December’s surprise inflation drop and the slowdown in UK growth.
“Fears of stagflation will override any immediate desire to drive down inflation, meaning we are likely to see a cut of 25bps this Thursday, lowering the base rate to 4.5%,” said Steve Matthews, investment director at financial services company Canada Life.
Matthews expects to see an 8-1 split on Thursday.
Good Wednesday morning, and welcome to MoneyWeek’s live blog. The Bank of England will announce its next interest rate decision at midday tomorrow.
All eyes have been on US president Donald Trump’s tariffs so far this week, which begs the question: will events across the pond influence the MPC’s thinking at its first meeting of the year?
Markets and economists think the answer to that question is: no.
While events in the US could well appear in the MPC’s meeting minutes, experts are fairly confident that the Bank of England will vote to reduce the base rate by 25 basis points tomorrow. This would bring it from 4.75% to 4.5%.
Stick with us for the latest forecasts, plus what it means for investment markets and your personal finances.
