The Bank of England’s October meeting decisions were just released, and as expected, it was an 8-1 vote to hold rates.
That’s the 79th month without a change to rates.
Analysts were overwhelmingly expecting the BoE’s monetary policy committee (MPC) to hold its benchmark rate at 0.5%.
As in August and September, MPC hawk Ian McCafferty voted for a modest 0.25 percentage point increase in Bank Rate.
For five months in 2014, McCafferty was joined by Martin Weale in pushing for higher rates, but all 9 members went back to voting to hold at the turn of 2015 when plunging oil prices started to send inflation south.
BoE chief economist Andy Haldane has recently been sounding dovish, suggesting that he’s more likely to vote for a rate cut than a hike right now, while governor Mark Carney last made somewhat hawkish suggestions on rates three months ago. Both voted to hold this time.
Analysts were looking to the minutes of the meeting as a potential source of hints on the BoE’s path ahead, but the main message there is that they will have to wait until November’s quarterly inflation report.
Here’s one interesting snippet on the potential risk from a Chinese/emerging market slowdown:
A deterioration in the global demand environment would slow the pace of expansion further. That could occur, for example, were the slowdown currently underway in a range of emerging economies, including China, to intensify.
But the record shows that the MPC thinks the eurozone’s recovery has “remained relatively resilient,” and as the UK’s main trading partner, that’s of higher importance.
See you in November.
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