MNI: BOE MPC On Hold With Mann, Haskel Dropping HIke Call

The Bank of England Monetary Policy Committee voted eight-to-one for unchanged policy at its March meeting, with Jonathan Haskel and Catherine Mann, who had both previously voted for a hike, joining the majority no change camp and Swati Dhingra again backing a 25 basis point cut.

This was the first time since September 2021 that no-one on the MPC had voted for a hike, with the vote and commentary underscoring that the policy cycle is turning to cuts. The minutes pointed to fracturing ahead, with a range of views in the unchanged camp on how far the risks of persistent inflation had receded.

"We're not yet at the point where we can cut interest rates but things are moving in the right direction," Governor Andrew Bailey said in a separate statement.

While Mann and Haskel ended their calls for a hike they appear less likely than some on the MPC to back a cut in the near future.

RANGE OF VIEWS

"There was a range of views among (the eight) members on the extent to which the risks from inflationary pressures had receded," the minutes said.

At one extreme, the view was that the data showed monetary policy was biting and reducing the more persistent inflation components. At the other end there were few signs of services inflation returning to a pace consistent with the 2% inflation target and only tentative evidence of diminishing second round effects, a view consistent with Mann's recent public comments.

The MPC stuck to the wording of its newly adopted guidance that it would monitor closely measures of the underlying tightness of the labour market, wage growth and service price inflation and keep under review how long Bank Rate should be maintained at its current level.