Wednesday, January 26, 2011
Two votes to hike at the Bank
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The big news from the minutes of the Bank of England's monetary policy committee meeting was that Martin Weale joined Andrew Sentance in voting for a hike in Bank rate. Whether he would have done so knowing the fourth quarter GDP numbers (his old National Institute methodology pointed to a 0.5% rise not fall in GDP) is another matter.

Adam Posen, meanwhile, may be feeling a little more comfortable with his call for further quantitative easing, as will the majority on the MPC, which sat on its hands. However, even for them, the decision was a closer one:

"For most members, recent developments implied that the risks to inflation in the medium term had probably shifted upwards. For some of those members, the decision this month was finely balanced. The analysis that fed into the forthcoming February Inflation Report projections would provide an opportunity to assess fully the developments since the previous Report, and to evaluate
more thoroughly the risks to inflation in the medium term. The publication of the Report would also give the Committee the opportunity to explain fully its assessment of the outlook and its policy decisions."

As I say, the question is whether the GDP numbers changed all that. The minutes are here.