Skip to content
Institute of Economic Affairs

Institute of Economic Affairs

Institute of Economic Affairs

Monday May 16, 2022
  • twitter
  • facebook
  • rss
  • Institute of Economic Affairs
  • Home
  • About
  • Staff
  • Jobs
  • Epicenter
  • Contact Us
  • twitter
  • facebook
  • rss
  • Blog
  • Film
  • Coronavirus
  • Research
    • Publications
    • Economic Affairs
    • EA Magazine
    • Brexit Unit
    • Int. Trade & Competition Unit
    • SMPC
    • Paragon Initiative
  • Media
    • Media Coverage
    • Press Releases
    • Media Enquiries
    • About IEA Comms
  • Students
    • Internships
    • Events and Conferences
    • Essay Competition
    • Student Resources
    • IEA Budget Challenge
    • Economics101
  • Events
    • Forthcoming Events
    • Past Events
  • Donate
    • Donate Now
    • Donate Monthly
    • IEA Patreon
    • Other Ways to Donate
    • Legacy Gift
    • Donate from USA
    • Contact Us
  • Home
  • About
  • Staff
  • Jobs
  • Epicenter
  • Contact Us

SMPC votes Six / Three to Hold Bank Rate in January

26 January 2020
Institute of Economic Affairs > Publications > Policies > Monetary Policy
In January 2020, the Shadow Monetary Policy Committee (SMPC) voted by six votes to three to keep Bank rate at 0.75%. But six of those who voted had a bias to raise rates in the next few months.

The majority view to keep rates at 0.75% was based on signs that the UK economy faltered towards the end of 2019. Despite some more recent data suggesting that the economy could pick up in early 2020, the majority opinion was to wait and see whether the acceleration materialised. Concern persisted about high levels of uncertainty, partly related to the departure of the UK from the EU on 31st January and the subsequent effects on business confidence of the ebb and flow of negotiations about a free trade agreement (FTA).

A further complication is the UK Budget, the first for Chancellor Sajid Javid, set for 11th March, which is widely expected to see some significant fiscal easing. However, it may be wise to know the extent of that fiscal loosening before reacting by raising rates. Therefore, the majority voted to keep rates on hold.

The three dissenting members thought that there should be no further delay and rates should be increased by ¼% to 1%. One argument is that the UK’s labour market data show that the economy is at full employment, as reflected in rising real pay. Taken with the removal of political uncertainty following the General Election, and of uncertainty about the timing of Brexit, they feel a rate increase is warranted. Furthermore, two dissenters argued that a rate rise is justified because rates had been too low for too long, promoting unproductive investment and resulting in low productivity and weak growth.

Fullscreen Mode
Share

SIGN UP FOR IEA EMAILS

Share this Story

previousLifestyle EconomicsVox PopChristopher Snowdon31 December 2019
nextLifestyle EconomicsTo Ban or Not to BanTim Worstall1 February 2020
latestPublicationsThe Northern Ireland Protocol: Current position and ways forwardVictoria Hewson16 May 2022
previous
Lifestyle Economics

Vox Pop

Why banning energy drinks doesn't make sense

26 January 2020
next
Lifestyle Economics

To Ban or Not to Ban

A critique of paternalism

1 February 2020
latest
Publications

The Northern Ireland Protocol: Current position and ways forward

16 May 2022
Institute of Economic Affairs
BE PART OF THE IEA TODAY
  • Donate
  • Like
  • Follow
  • Watch

NEWSLETTER SIGN UP

Privacy Policy
© Institute of Economic Affairs
REGISTERED IN ENGLAND 755502, CHARITY NO. CC/235 351, LIMITED BY GUARANTEE
×
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies. However you may visit Cookie Settings to provide a controlled consent.
Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Advertisement

Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.

Functional

Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.

Uncategorized

Undefined cookies are those that are being analyzed and have not been classified into a category as yet.

Save & Accept
Powered by CookieYes