BOE Rate Decision Shows Mismatch Between Vote and Tone

Dow Jones
Jul 30

1257 GMT - The Bank of England's decision leave interest rates unchanged Thursday shows a divergence between the vote split and the central bank's rhetoric, Ebury's Matthew Ryan says in a note. The BOE voted 6-3 to hold rates steady with three policymakers favoring a rate rise, more than expected. However, the BOE's remarks point to clear signs of disinflation and little evidence of second-round effects of higher energy prices, he says. This mismatch is unusual and points to a divided BOE, he says. "The Monetary Policy Committee now sees inflation peaking much closer to 3% than 4% this year, which we don't think is high enough to warrant undue panic or force the bank's hand."

 

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