BOE Dissenters Break Long Spell of Unanimity on Interest Rates

(Bloomberg) --

The Bank of England’s 7-2 vote split on Thursday marks a departure from more than a year of unanimity.

Two policy makers -- Michael Saunders and Jonathan Haskel -- voted to cut interest rates from 0.75%, the first divided vote since June 2018, when three members including Saunders voted to raise rates. This was also Haskel’s first dissent since joining the Monetary Policy Committee in September that year.

The U.K. is embroiled in the worst political ructions in a generation as it tries to leave the European Union. The departure deadline has been extended three times, and the country is heading for a snap election on Dec. 12 to break the deadlock on what the future relationship with the EU should be.

The BOE maintained its view that the monetary response to Brexit could go in either direction as it strives to keep to its 2% inflation target. Yet the new divisions suggest easing might be more likely, especially if the global economy fails to stem a slowdown. After the last dissent, the MPC voted unanimously at the following meeting to increase interest rates.

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