BOE: Rates Held at 5.25% In 6-3 Vote; No Changes to Guidance

The MPC voted 6-3 in favour of holding Bank Rate at 5.25% at its December meeting, with the guidance in the MPS materially unchanged compared to November.

• Greene, Haskel and Mann were the three dissenters as in November (and as expected in our preview). There was some speculation that one or more of the dissenters (most likely Greene) could opt for a hold in December.
• The Bank retained guidance that further tightening may be required if persistent inflationary pressures remained evident and expected the policies in the Autumn Statement to increase the level of GDP by around 0.25% over the coming years.
• There was no clear push back against the increases in market rate cut pricing over the past weeks.
• The MPS and minutes simply acknowledged that DM bond yields had fallen materially since November, and that "recent news had tended to affect, and on net reduce, the length of time policy rates were expected to stay at peak".

The Governor Andrew Bailey underlined that the inflation fight goes on for the BOE.

"We've come a long way this year, and successive rate increases have helped bring inflation down from over 10% in January to 4.6% in October. But there is still some way to go. We'll continue to watch the data closely and take the decisions necessary to get inflation all the way back to 2%," Bailey said.