- It is the first time that there was two rounds of voting for the bank rate
- The distribution was for 4 members wanting to hold, 4 members wanting to cut by 25 bps, and 1 member wanting to cut by 50 bps
- There is a provision in the legislation for the governor to make a casting vote in an event of a tie
- But my view is that said provision is one that should be used when the committee has even number of members; it is not the case here
- It is clear today that the balance of distribution today was to cut rates
- We can easily see where the balance is, so it was appropriate to do a second voting round
- And it was sensible to decide on whether to hold rates or to cut by 25 bps in second voting proposition
Bailey goes on to reaffirm that “what really matters is the decision and the outcome”, brushing aside all the smaller details as to how they got there today. I think if they were not on a slower path, this would garner more scrutiny. But the fact that they are likely to pause in September means that this can be one that is easily looked past. Of course, it still depends on what UK economic data will be in the months ahead in deciding whether there will be rate cuts for November or December.
This article was written by Justin Low at investinglive.com.