Low-key BoE MPC meeting to signal no change – SocGen

Brian Hilliard, Research Analyst at Societe Generale, suggests that today’s BoE meeting should be a relatively low-key affair as market speculation of rate increases has receded.

Key Quotes

“The committee will move back to full strength with the arrival of Sir David Ramsden as the new Deputy Governor, Markets and Banking. We expect him to vote for unchanged policy, taking the vote to 7-2.” 

“The market is now becoming accustomed to McCafferty and Saunders voting for rate hikes and expects them to continue to do so. Saunders has expanded on his views in his latest speech. He explicitly addressed the issue of Brexit uncertainty, saying it was not enough for him to wait any longer to tighten policy.”

“Ramsden joined the committee at the beginning of the month

The new element in the September meeting will be the arrival of Sir David Ramsden as the replacement for Charlotte Hogg as Deputy Governor, Markets and Banking. He is not a stranger to the MPC, having been the Treasury’s (non-voting) observer on the committee for a long time. Call us cynical if you like, but we expect that he will act according to the Treasury outlook on the world which is usually to favour growth over inflation concerns. That means we expect him to vote for no change at the meeting, moving the vote to 7-2.”