As expected, the Bank of England (BOE) decided to maintain its bank rate at 4.75% last Thursday (March 20). However, in a deviation of expectations (for a division of 7-2), eight members of the Monetary Policy Committee (MPC) voted to maintain the policy rate unchanged, with only the usual moderate Swati Dhingra voting in favor of a reduction of 25 basic points to 4.50%, says the economist of UOB Group, Lee Sue Ann.
MPC will adhere to a quarterly rhythm of cuts
“The Bank of England (BOE) maintained interest rates without changes last Thursday (March 20), as expected. The surprising thing was the division of the vote, which saw eight members of the Monetary Policy Committee (MPC) voting to maintain the policy rate without changes, with only the usual moderate Swati Dhingra voting in favor of a reduction of rates of 25 basic points to 4.50%.”
“Our base case is that the MPC will adhere to a quarterly rhythm of cuts. While the chances of the BOE cut in May are now lower given the division of the vote, the statement and the minutes, we believe that a cut in May is still in the letters considering the slowness of the United Kingdom economy.”
“However, we will not make changes in our opinion since we think that the BOE will also want to wait for the spring statement later this week (March 26, 8pm SGT) to make large -scale changes in its economic evaluation.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
