BOE: Guidance and Vote Split Unchanged As Rates Held at 5.25%

The MPC voted 7-2 to maintain Bank Rate at 5.25%, with the guidance language materially unchanged on the May MPS.

• Dhingra and Ramsden continued to vote for a 25bp cut in rates, in line with our expectations coming into the decision.
• A small change was made in one sentence of the guidance, with monetary policy needing  "to remain restrictive for sufficiently long to return inflation to the 2% target" (rather than "sufficiently restrictive"). 
• In the Monetary Policy Minutes, a line was added noting that "some recent data suggested a risk that near-term pay growth could moderate by less than had been expected in the May report".
• Overall, the lack of material changes is unsurprising, given recent data outcomes and the proximity of the UK General Election. MPC members will likely use the two-week period after the election to communicate any changed messaging ahead of the August meeting.
• The MPS noted that "as part of the August forecast round, members of the Committee will consider all of the information available and how this affects the assessment that the risks from inflation persistence are receding".