UK’s MPC vote. Does going from 7-2 to 6-3 mean a hike is coming sooner than we thought?


First, recall that the inveterate hawk McCafferty is about to depart the Committee, to be replaced by Jonathan Haskell.  It’s not possible to parse his views at this stage, but McCafferty’s were at the very hawkish end of the scale, and it’s surely likely that a random new draw for the vacancy would be less inclined to vote for a rate increase than he was.

Second, Chief Economist Andy Haldane’s switch into the camp voting for a rate increase may be less of a bell-weather than you might think from reading press coverage of it.

His views about monetary policy seem to me to be somewhat more changeable than those of others.  [This is not meant as a criticism].

His speech outputs – so one presumes also his time input – seem less engaged with the run of the mill monetary policy work at the Bank, ranging across subjects that extend far beyond the Bank’s core jobs.

And he often seems to relish taking contrarian positions and floating radical thoughts [eg reform of monetary institutions to allow for negative interest rates].

So a fair argument could be made that AGH might very well change his mind again.   Or, even if he doesn’t, be unlikely to take anyone else on the Committee with him that would not already be thinking of doing so in the future.  Or, equivalently, even if persuasion is not part of this process, his own change of heart may be less revealing of currents of thought that are soon to sweep up others in the ‘dove’ camp.

For these reasons, I don’t read much [concerning the likely trajectory of rates] into the change in the balance of votes by itself.

[Is this what happens?  At some point one starts writing stuff with hawks and doves, with no qualification at all necessary?]

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