February 1, 2024
Interest Rates Held again at 5.25%
Interest rates have been held at 5.25% again; this is the 5th time rates have been steady at this level, having peaked in August 2023. There may be some good news on the horizon though.
Voting at the Monetary Policy Committee
Voting at the Monetary Policy Committee resulted in the interest rate being held at 5.25%. The rate has been holding at this level since August 2023.
The Voting
There was an entire committee of 9 for the vote. Six voted to hold at 5.25%, two voted to increase to 5.50%, and one voted to reduce to 5%. Still, some believe that the rate is not high enough, but there is no real suggestion of rate reduction based on the voting.
| Member | Direction | Amount |
|---|---|---|
| Andrew Bailey (Governor) | Hold | 5.25% |
| Ben Broadbent | Hold | 5.25% |
| Huw Pill | Hold | 5.25% |
| Dave Ramsden | Hold | 5.25% |
| Megan Greene | Hold | 5.25% |
| Sarah Breeden | Hold | 5.25% |
| Jonathan Haskel | Increase | 5.50% |
| Catherine Mann | Increase | 5.50% |
| Swati Dhingra | Decrease | 5% |
Outlook
Whilst the voting shows no sign of voting towards a reduction other than one vote, the Bank of England does suggest it may be coming. They have at least discussed the potential to reduce interest. This is likely a result of inflation expected to fall quicker this year.
Although discussing it, I do not foresee there being a reduction until the committee is certain inflation is fully under control. I can't recall the last time there was a mix of hold, increase and reduce voting with the MPC. That may be something or nothing.
As always, if I was to bet on it, I would suggest the rate will drop by the end of Q2 2024.
Lee Wisener
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