SMPC votes Six / Three to Hold Bank Rate in September.
In its September 2018 e-mail poll, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of six to three, to hold rates in September. The three favoured a 0.25% rise.
Advocates of holding rates noted that the Bank raised rates last month and that broad money growth was relatively weak, which they interpreted as indicating no urgency about the next rise. Most did, however, have a bias to raise in due course with November being a favoured date.
Advocates of raising rates noted that the UK economy continues to grow steadily, that concerns about the impact of Brexit should not deter policymakers from continuing the process of monetary policy normalisation now, and that because several rises were needed and the Bank only raised rates 0.25% in August, the recent rise is not a good basis for not raising rates steadily further.
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.