United Kingdom: BOE on pause as vote split surprises again – UOB Group

As expected, the Bank of England (BOE) decided to maintain its Bank Rate at 4.75% last Thu (20 Mar). However, in a deviation from expectations (for a 7-2 split), eight members of the Monetary Policy Committee (MPC) voted to keep the policy rate unchanged, with only perennial dove Swati Dhingra voting for a 25 bps rate cut to 4.50%, UOB Group's economist Lee Sue Ann notes. 

MPC to stick to a quarterly pace of cuts

"The Bank of England (BOE) left interest rates unchanged last Thu (20 Mar), as expected. What was surprising was the vote split, which saw eight members of the Monetary Policy Committee (MPC) voting to keep the policy rate unchanged, with only perennial dove Swati Dhingra voting for a 25 bps rate cut to 4.50%." 

"Our base case is that the MPC will stick to a quarterly pace of cuts. While the odds for the BOE to cut in May are now lower given the vote split, statement, and minutes, we think a May cut is still in the cards considering the sluggishness of the UK economy." 

"We will, nonetheless, not be making any changes to our view as we think the BOE may also want to wait for the Spring Statement later this week (26 Mar, 8pm SGT) to make any wholesale changes to its economic assessment."