My MPC-ometer forecasts an “average interest rate decision” of -14 bp at this week’s MPC meeting. This is below the -12.5 bp threshold for action and suggests a 5-4 split in favour of a quarter-point cut. <\/p>\n
As discussed in recent posts, the story is that activity indicators are firmly in rate-cutting territory but are being offset by the highest household and business inflation expectations since the MPC’s inception. <\/p>\n
A quarter-point reduction is expected by the overwhelming majority of economists. Interestingly, the Sunday Times<\/em> Shadow MPC also voted 5-4 to cut. <\/p>\n Could the MPC surprise with a no change decision? In theory, the MPC-ometer’s -14 bp forecast would be consistent with five votes for unchanged, three votes for a quarter-point cut and one vote (presumably by David Blanchflower) for half a point. However, three-way splits on the MPC are rare (the last one occurred in May 2006), so I have discounted this possibility.<\/p>\n","protected":false},"excerpt":{"rendered":" My MPC-ometer forecasts an “average interest rate decision” of -14 bp at this week’s MPC meeting. This is below the -12.5 bp threshold for action and suggests a 5-4 split in favour of a quarter-point cut. As discussed in recent posts, the story is that activity indicators are firmly in rate-cutting territory but are being […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2530","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2530"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2530\/revisions"}],"predecessor-version":[{"id":4839,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2530\/revisions\/4839"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}