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Pill: Reasons he didn't vote for 50bp

BOE
  1. "I am sceptical of efforts to return Bank Rate quickly to some pre-defined neutral level or terminal rate... such an approach risks increasing inflation and output volatility if policy is mis-calibrated owing to assumingthe wrong value of R- or Y-star... Better to adopt a more measured and data-dependent approach"
  2. "I worry that taking unusually large policy steps may validate a market narrative that Bank policy is either foot-to-the-floor on the accelerator or foot-to-the-floor with the brake"
  3. "If – as I expect is a risk – we are set to need more nuanced monetary policy actions in the future as the macroeconomic situation normalises and decisions become more finally balanced, then re-establishing a reputation for measured and purposeful steps in policy is valuable. Restricting ourselves to a 25bp now – albeit with the prospect of more to come in the coming months – is an investment in containing market expectations of aggressive ‘activism’ that I saw as worth making"
  • "A case can be made for a measured rather than activist approach to policy decisions, with a focus on more persistent developments in the data that have lasting implications for the outlook for price stability. That is what I would label a ‘steady handed’ approach to monetary policy"
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