The BoE was far from unanimous in their vote to cut rates by a quarter point at their April policy meeting, with a 6-2-1 vote. Perennial dove David Blanchflower voted for a half point cut, while Andrew Sentance and Tim Besley felt that a cut wasn’t warranted.
The BoE was far from unanimous in their vote to cut rates by a quarter point at their April policy meeting, with a 6-2-1 vote. Perennial dove David Blanchflower voted for a half point cut, while Andrew Sentance and Tim Besley felt that a cut wasn’t warranted. The central bank saw the downside risks outweighing the concerns over inflation, although many felt that inflation would continue to rise. Rising oil costs and increasing inputs for producers will start to pass-through to consumer prices, which is expected to keep inflation above the MPC’s 2% target and threaten the 3% threshold which requires Governor King to wt=rite a letter to Parliament explaining the cause. However, the policy makers felt that the credit crunch and housing slump posed greater risks as they continue to weigh on consumer spending and investment. –John Rivera, Currency Analyst
