BOE Instant Answers - Bank cuts rates by 25bps

August Instant Answers Questions

1.    Was the Bank Rate changed, and if so by how much? 25bps cut to 5.00%

2.    Number of members voting for cut? 5

3.    Number of members voting for unchanged rate? 4    Pill, Mann, Haskel and Greene

4.    Number of members voting for a hike? Zero

5.    Did the MPC say the next move in monetary policy was likely to be a (another) cut? No

6.    Did the MPC say that “the risks from inflation persistence are receding”? N/A see under

7.    Did the Minutes / Statement note that the decision was “finely balanced” for some members? Yes (from the Minutes)  -  "Finely balanced" only referenced among "some of the members" who voted for a rate cut.

8.    Did the MPC again say Bank Rate is likely to “remain restrictive for sufficiently long”? Yes

9.    Did the MPC again say it “has judged since last autumn that monetary policy needs to be restrictive for an extended period of time”? No

10.    Did the MPC leave its guidance paragraph materially unchanged versus the June policy statement? Yes        -   Inflation needs to remain restrictive for sufficiently long, and risks to inflation persistence still need to be monitored closely. 

11.    UK CPI forecast in 2 years time at market rates (mean / mode)? 
Previous: 1.9% / 1.9% (Previous Q3-26 was 1.8% / 1.8%) Mean: 2.0% / Mode: 1.7%. Upside skew of 0.3pp.

12.    UK CPI forecast in 3 years time at market rates (mean / mode)? 
Previous: 1.6% / 1.6% Mean: 1.8% / Mode: 1.5%

-The MPC will vote in September on its 24/25 Gilt reduction target.

-Re Q6) in response to unanswered question on inflation persistence:

• From the MPS: "There has been some progress in moderating risks of persistence in inflation", but "the Committee continues to monitor closely the risks of inflation persistence" as a risk second round effects "will prove more enduring in the medium term."