Sterling unaffected with Bank of England voting on hold

MPC Minutes and an unchanged voting pattern contributed little to the growing debate around UK monetary policy. A unanimous vote in favour of unchanged rates conceals two voting members – Weale and Mcafferty – biding their time while inflation remains around 0.0%, but who will be increasingly trigger-happy as CPI readings begin to rise. Carney’s recent comments about ‘close’ calls from some of the committee confirms that had CPI not been on a path into negative territory, confirmed this week, these two renowned hawks would have been in favour of a 0.25% rate hike. With inflation expected to turn a corner within the next few months, we believe a change in voting will be in evidence within the next two meetings. Just 3 more votes will then be needed for confirmation of what would be a momentous, crisis-exiting rate hike, with the chances of a 2015 policy change currently looking underpriced.

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