Bank of England interest rate decision to be scrutinised following unprecedented second vote
The Governor of the Bank of England and other members of the Monetary Policy Committee (MPC) will appear in front of the Treasury Committee next Wednesday afternoon.
Meeting details
The session will focus on the Bank’s August Monetary Policy Report and the decision to reduce the Bank Rate by 0.25 percentage points to 4%.
In an unprecedented situation, the MPC voted for a second time after the first ballot didn’t provide an outright majority. The result of the first vote was a split between four to keep Bank Rate unchanged at 4.25%, four preferring to cut by 0.25% to 4% and one voting for a 0.5% cut to 3.75%.
The Governor proposed a second ballot on a forced choice between holding the current Bank Rate or a 0.25% cut, with the latter gaining Professor Taylor’s vote for a majority of five. This is the first time that a second vote has taken place.
As well as Andrew Bailey, the Deputy Governor for Monetary Policy, Clare Lombardelli, and two External Members, Megan Greene and Professor Alan Taylor, will give evidence to the Committee. This means each vote preference will be represented at the session.
Including its vote in August 2024, the MPC has voted to cut the Bank Rate five times in the last year, to its current level of 4%.