BOE’s Unanimous Rate Vote Marks Year of Policy Maker Harmony

(Bloomberg) --

Bank of England interest rate setters’ unanimous decision to keep the benchmark interest rate at 0.75% Thursday marks a year of agreement on the Monetary Policy Committee.

None of the nine policy makers has dissented from the group since June 2018, when Chief Economist Andy Haldane and external members Michael Saunders and Ian McCafferty went against the others in calling for an immediate rate increase. The MPC opted for a quarter-point raise at the following meeting in August.

The three-century old central bank has been plagued by accusations of group think and this is the longest run of unanimous votes on rates at meetings since 2014. The BOE reduced the number of policy meetings it holds to eight from 12 from September 2016.

The unanimity may fail to reflect emerging signs of difference between policy makers, masked as the U.K. endures a tumultuous period of political upheaval and Brexit uncertainty. Officials, led by Governor Mark Carney, said Thursday that while they still see the need for interest-rate hikes in coming years if their forecasts bear out, they acknowledge that investors are taking a different view than the bank’s assumption of a smooth Brexit.

“Comparing the minutes with some recent speeches, especially by Michael Saunders, which have been much more hawkish on the need for interest rates rises, suggests that there may be more disagreement beneath the surface than the unanimous vote implies,” said Thomas Pugh, U.K. Economist at Capital Economics.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Fergal O'Brien

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