Similar to February, it’s a case of focusing on voting intentions when it comes to the BOE reaction. The central bank moved to cut the bank rate by 25 bps to 4.25% as expected. However, the vote split is what is raising eyebrows as we look to digest the situation. Dhingra and Taylor voting for a 50 bps rate cut is somewhat expected but both Mann and Pill voting for the bank rate to be unchanged is the standout here.
That is leading to traders leaning towards this as being more of a hawkish cut.
Once again, Mann is stealing the spotlight as she did with February when she voted for a 50 bps rate cut at the time. Today, she’s siding with calling for the central bank not to move forward with a rate cut. So, I guess she has found back her hawkish roots.
As much as the vote split is looking rather messy here, let’s take a step back to see what that actually means.
Considering global trade developments lately, there’s plenty for central banks and policymakers to debate. And let’s face the facts, there’s going to be differing opinions on that and what the impact from Trump’s tariffs will be.
And that is perhaps what we’re seeing here. In the case of the Fed and most other central banks, perhaps things are less transparent. All we get is the supposed “consensus” view/decision and policymakers have to do their part and show unanimity rather than be explicit about how they really feel at times.
But in the case of the BOE, the bank rate vote does what it does. It presents an opportunity for policymakers to express their desired position.
What I’m saying is that the bank rate vote perhaps just reflects the debate that all other central banks are having, but not being upfront and frank about.
Either way, it’s a fact now that policymakers at the BOE are having mixed views
