What to expect from the vote

As we noted yesterday (and we had stated in our preview), we think that the upward surprise to services inflation yesterday will be enough to push the MPC to vote for a 25bp hike today. We expect the following breakdown:

• 2-3 dovish members voting for an unchanged decision. Cunliffe potentially joining Dhingra and Tenreyro in voting for an unchanged decision, with an outside chance that Tenreyro votes for a cut at today's meeting.
• 1-3 members voting for a 50bp hike. Our base case sees Mann voting for a 50bp hike today. There is a chance that she is joined by Haskel and a small chance that Ramsden also votes for 50bp.
• 3 centrist members: We expect Bailey, Broadbent and Pill to vote for a 25bp hike in light of the services inflation print that was published yesterday. Note that they will have had plenty of time to have analysed the data having received it on Monday morning.

Markets are currently pricing around 21bp for today's meeting (we think around 20bp is fair so we are within that ballpark). The vote split will be important for the market reaction, but in some ways the guidance (or lack of guidance) may be even more significant today.