BoE Minutes Show 8-1 Split, Blanchflower Votes For 50bp Rate Cut

BoE September minutes reveled a split 1-8 vote, with Besley voting with the majority for a steady hand after two consecutive months of favoring a 25 bp rate hike. Meanwhile, Blanchflower now voted for a 50 bp rate cut, after having favored a 25 bp rate cut over the previous six months. This was right in line with our forecast while the market consensus had been for another 1-7-1 vote. Compared to the August minutes, the committee now viewed downside risk to inflation somewhat higher, as demand slackening had increased. But the depreciation of the Sterling is adding upside pressure to inflation. This is in line with the August Monetary Policy Report, which opened the door to the possibility of a rate cut once there is a real sign of inflation abating.

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