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MNI BoE Review - February 2025: Counting Doves

We look at the implications of the tweak to the guidance, the more dovish vote split and what this means for March.
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  • The MPC delivered the expected 25bp cut and its guidance continued to point to “gradual” rate cuts ahead (albeit adding the word “careful”). The cut was as expected. However, what was not expected was the vote split with two members voting for larger 50bp cuts.
  • Dhingra reinforces her dovish status; expect her to keep voting for cuts for some time. While we expect Mann to vote for cuts at least in March and May (but it is more uncertain beyond then - we talk through the rationale).
  • "Case 1" is seen as less likely - but this doesn't mean less downside risks... just different downside risks.
  • We think this leaves us only needs one more MPC member in favour of a cut in March to sway the outcome - but at this point think that is relatively unlikely. We note our rationale in the report.
  • We look at the takeaways from the new inflation forecasts, the additional of the word "careful" to the guidance and the Bank's updated neutral rate estimates.

FOR THE FULL PUBLICATION INCLUDING UPDATES FROM 20 SELLSIDE ANALYST VIEWS PLEASE USE THE FOLLOWING LINK: MNI BoE Review - Feb25.pdf

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  • The MPC delivered the expected 25bp cut and its guidance continued to point to “gradual” rate cuts ahead (albeit adding the word “careful”). The cut was as expected. However, what was not expected was the vote split with two members voting for larger 50bp cuts.
  • Dhingra reinforces her dovish status; expect her to keep voting for cuts for some time. While we expect Mann to vote for cuts at least in March and May (but it is more uncertain beyond then - we talk through the rationale).
  • "Case 1" is seen as less likely - but this doesn't mean less downside risks... just different downside risks.
  • We think this leaves us only needs one more MPC member in favour of a cut in March to sway the outcome - but at this point think that is relatively unlikely. We note our rationale in the report.
  • We look at the takeaways from the new inflation forecasts, the additional of the word "careful" to the guidance and the Bank's updated neutral rate estimates.

FOR THE FULL PUBLICATION INCLUDING UPDATES FROM 20 SELLSIDE ANALYST VIEWS PLEASE USE THE FOLLOWING LINK: MNI BoE Review - Feb25.pdf