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SMPC votes seven / two to raise bank rate in March

In its March 2017 e-mail poll, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of Seven to Two, to raise rates in March. Three members voted for an immediate rise of 0.5%. Fourther favoured a 0.25% rise.

Advocates of raising rates noted that economic growth is steady, monetary growth has been strong, inflation is rising and set to go comfortably above target and sterling is fairly weak. This would appear to be a textbook situation for a rate rise.

Those advocating a hold felt it was worth waiting to see what happens next when Article 50 is triggereds.

The SMPC is a group of economists who have gathered quarterly at the IEA since July 1997, with a briefer e-mail poll being released in the intermediate months when the minutes of the quarterly gathering are not available. That it was the first such group in Britain, and that it gathers regularly to debate the issues involved, distinguishes the SMPC from the similar exercises carried out elsewhere. To ensure that nine votes are cast each month, it carries a pool of ‘spare’ members. This can lead to changes in the aggregate vote, depending on who contributed to a particular poll. As a result, the nine independent and named analyses should be regarded as more significant than the exact overall vote. The next SMPC poll will be released on Sunday 7th May 2017.

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