No surprise from the BoE, next week key?

Views From the Marsh - David Owen

No surprise from the BoE; a 6-3 vote to keep rates on hold (with Deputy Governor Dave Ramsden, as in December, voting alongside two of the externals, Swati Dhingra and Alan Taylor, for a 25bp cut).

As we highlighted in an earlier note on Substack, the bar for cutting rates today was always going to be high. Next week sees keynote speeches, including one by the Governor, and one by the external Megan Greene on the BoE’s balance sheet (and presumably the switch somewhat away from reserves to longer-term repos), and importantly the BoE is hosting a two-day conference “Transforming monetary policy - How should we think about uncertainty and risks?”

Given that much of the focus of the conference will be on communication and making (much better) use of scenario analysis, it would have been very odd for the BoE to have cut rates today, only to explore how better to communicate any such moves next week.

We will writing a detailed research note on the UK (but not on Substack) after the dust h…