Monetary Policy Committee (MPC)

  1. 'No need' for an interest rate cut

    Today Programme

    BBC Radio 4

    Bank of England

    On Thursday, the Bank of England voted to keep interest rates at 0.75% but the Monetary Policy Committee (MPC) said it was poised to cut if necessary.

    So will that happen at the next meeting in March?

    Former MPC member Andrew Sentance tells the BBC's Today programme: "If forecasts turn out the way the Bank is expecting, I do not think we need to see an interest rate cut."

    He points out that since interest rates had been "at a very low level" for a long time, "the benefit of a cut would be very modest."

    Mr Sentance says keeping rates at such a low level "does not necessarily help the economy in the long term" and expressed disappointment about that aspect of Mark Carney's time as Bank governor. "Monetary policy has been adrift," he says.

  2. A 'sensible decision' by the Bank

    Quote Message: On balance, this seems like a sensible decision by the MPC as more data is needed to see if the economy has indeed enjoyed a sustainable 'Boris bounce' since the election. Most recent business and consumer surveys do show a pick-up in confidence and the housing market also seems to have perked up in January, but we don't yet have any official data confirming an upturn in actual consumer spending or business investment. There are also many global uncertainties to consider, including the extent of the further spread and economic impact of the new coronavirus. If the UK economy fails to lift off in the first quarter, whether for domestic reasons or due to further adverse global shocks, then a rate cut could be on the cards in the spring. from John Hawksworth chief economist at PwC
    John Hawksworthchief economist at PwC
  3. Economies are getting stronger, says Carney

    Szu Ping Chan

    Business Reporter, BBC News

    Mark Carney

    The Bank of England press conference has begun and outgoing governor, Mark Carney, says the last decade ended “with a whimper” with a marked slowdown in global growth led by a manufacturing recession.

    UK growth last year was its weakest since 2010 and business investment remains subdued.

    So will the next decade start with a bang? Mr Carney says global growth has now stabilised.

    An easing of trade tensions has played a part. So have central banks, with the European Central Bank and Federal Reserve opting to cut rates last year.

    Manufacturing activity is on the up he says, and there are signs from around the world that economies are getting stronger.

  4. Pound rises on rate hold

    The Bank of England's new governor Andrew Bailey
    Image caption: The Bank of England's new governor Andrew Bailey will have to 'land on his feet running'

    The pound has risen 0.35% against the dollar to $1.3067 after the Bank of England's Monetary Policy Committee voted to hold the interest rate.

    Sterling also gained against the euro, up 0.21% at €1.1849.

    The MPC made clear, however, that it may act if the UK economy fails to gain momentum.

    "With Mark Carney seemingly having deferred this policy decision to his successor, Andrew Bailey will need to land on his feet running," says Principal Global Investors' market strategist, Seema Shah.

    "Unless economic activity data improves measurably over the coming months, reflecting proof of the so-called 'Boris bounce', and interest rate cut is likely to remain on the agenda for 2020.".

  5. Bank poised to cut rate if post-election bounce fails to materialise

    Interest rate

    Minutes from the Bank of England's Monetary Policy Committee meeting show that they expect an improving global backdrop and reduction in uncertainty following prime minister Boris Johnson’s election victory to support the UK economy.

    However, the MPC said it was poised to lower interest rates if the expected post-election bounce failed to materialise.

    “Policy might need to reinforce the expected recovery in UK GDP growth should the more positive signals from recent indicator of global and domestic activity not be sustained,” the minutes said.

  6. Bank votes 7-2 to keep interest rate unchanged

    Members of the Bank of England's Monetary Policy Committee voted 7-2 to keep the interest rate on hold at 0.75%.

    Governor Mark Carney voted with the majority in his last meeting as head of the Bank of England. He will be succeeded by Andrew Bailey, currently head of the Financial Conduct Authority.

    MPC members Jonathan Haskel and Michael Saunders had voted for a quarter point cut.

  7. Interest rate held at 0.75%

    Bank of England

    The Bank of England has voted to hold the interest rate at 0.75%.

    There had been expectations that the Bank's Monetary Policy Committee would cut the rate following mixed economic data in recent weeks.

  8. Why are Saunders' comments affecting the pound?

    Sterling coins and notes

    One analyst has been ruminating over why the comments from a Bank of England policymaker should be hitting sterling.

    "The latest declines come after Michael Saunders stated the Bank of England may lower interest rates due to Brexit uncertainty," said David Cheetham, chief market analyst, at XTB online currency traders.

    "Quite why this is moving the markets is unknown to be honest with the biggest surprise being that this is seen as a surprise at all."

    He said economic data had been quite poor on the whole.

    "Throw in the almost universally acknowledged continued levels of heightened uncertainty on the political front, with markedly divergent Brexit paths still possible and it is actually pretty shocking that a comment that a rate cut is 'quite plausible' has caused such a response."

  9. Saunders comments 'adding weight on the pound'

    Pound coins
    Quote Message: Bank of England rate setter Saunders made pretty dovish comments, saying it’s quite plausible the next move is a cut. In making the case for a cut now it conforms to the belief in many in the market that the Bank is barking up the wrong tree with its slight tightening bias in its forward guidance. The comments from Saunders are clearly an added weight on the pound. from Neil Wilson chief analyst at Markets.com
    Neil Wilsonchief analyst at Markets.com