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BoE's MPC Maintains Rate Amid Split Vote: A Shift Towards Dovish Stance Emerges

The nine-member Monetary Policy Committee (MPC) voted to keep the UK's key interest rate at 5.25%. The vote, however, showed a three-way split: six members favored maintaining the rate, Swati Dhingra, known for her dovish views, voted for a decrease to 5%, and two members pushed for a hike to 5.5%.


This result indicates a subtle shift towards a more dovish position compared to the previous meeting, where three members voted for a rate increase and none for a decrease. Notably, MPC member Megan Greene transitioned from the 'hawkish' faction to the majority, while Dhingra continued her support for rate reductions.


Our Take: It appears that the Bank of England's last rate increase in the current cycle has already occurred, but a rate cut is not imminent. Economic data is generally outperforming expectations and is stronger than in the Euro Area. Given the current situation, the Bank of England is expected to be the last among major central banks, including the Federal Reserve and the European Central Bank, to begin reducing rates.


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