Bank of England in 'no rush' to cut rates but growing MPC consensus fuels market speculation

Service inflation will be key

The decision by the Bank of England’s Monetary Policy Committee to hold rates for the fifth consecutive time met market expectations, but industry players have pointed to a shift in member consensus, which may signal a turning point for interest rates.

Eight MPC members voted to hold rates, while one voted to implement a 25 basis point cut. The split was markedly different from the previous meeting in February, in which two members opted to raise rates to 5.5% while one voted for a cut. Luke Bartholomew, senior economist at abrdn, called the change in voting "surprising" considering the two members who called for a raise in February changed their stance after six weeks, joining the majority. "This change in vote will fuel market speculation about the Bank pivoting towards rate cuts in the near future," he noted. Bank of England h...