How the Bank of England’s (BoE) monetary policy committee (MPC) are expected to vote | City A.M.
The Bank of England is widely expected to raise the policy rate to 0.75 per cent on Thursday. This would be the second rate hike in a decade and take the policy rate to its highest level since 2009.
Recent data have improved, but with some pockets of weakness still evident and ongoing lack of clarity over Brexit holding back investment, the decision will be controversial.
Here is how we think each of the nine members of the Monetary Policy Committee (MPC) are expected to vote.
MARK CARNEY – GOVERNOR SET TO BE MORE RELIABLE THIS TIME?
HIKE. Carney ruffled feathers recently when he expressed greater confidence in the UK economy saying “employment is at a record high, import price inflation is fading, real wages are rising”. Economists have previously voiced concerns over his mixed messages and prior to the May meeting Carney dampened expectations of a rate hike. This time round he has not taken any opportunities to talk down a hike, leaving the door open for only the second hike of his time as governor.
SIR JON CUNLIFFE – DOVE CALLING FOR STODGINESS
HOLD. Voted against the last hike in November, and recently said he favours “stodgy” monetary policy. However, he pedalled back slightly on his dovish stance recently, saying he saw signs of “consistent wage growth”.
SIR DAVE RAMSDEN – A DOVE ON THE EDGE
HOLD. Former Treasury economics supremo Ramsden also opposed the November rate hike given the UK’s unusual situation. More recently he said that the UK’s period of low wage growth “appears to be coming to an end”.
SILVANA TENREYRO – WATCHING THE DATA
HIKE. External member Tenreyro is among the lesser-known on the committee. She recently said she will “watch very closely the data” for the July meeting. This is a switch from her “vote of caution” and wait-and-see stance in May and June.
MICHAEL SAUNDERS – DEPUTY HAWK
HIKE. Another external member, Saunders has been voting for a rate hike since March. Views the economy as currently growing at a “modest but steady pace”. This month said rates may have to rise faster than markets are pricing. Anything but hike would shock.
GERTJAN VLIEGHE – QUIETLY HAWKISH
HIKE. Vlieghe has been quiet lately. Back in March he said “one or two quarter point rate increases per year” were consistent with the latest forecasts. That pointed to a hawkish shift, even though he previously voted to hold steady.
BEN BROADBENT – GOING WITH THE FLOW
HIKE. The deputy governor has always stuck with the consensus on interest rate votes. He reminded us recently the BoE’s task “remains to hit the inflation target”. Inflation has been above target for the last 17 months, although he gave away little in recent comments.
ANDY HALDANE – JUNE FLIPPER
HIKE. Haldane’s shock vote for a hike in June was a flip from his earlier dovish stance – and the first dissenting vote from the Bank’s chief economist in seven years. The Bank’s blue-sky thinker said this was hardly “radical” given the super-low level of rates.
IAN MCCAFFERTY – THE HAWKS’ DOYEN
HIKE. His worry about too little too late leading to “aggressive” hikes later should be appeased in his last meeting on the MPC. A call for a hike would be his fourth such vote in a row, after a year of banging the drum for rates to rise.
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