Bank of England (BoE) left the policy unchanged, as expected, at 5%, in a 8-1 split vote, Rabobank’s Senior Macro Strategist Stefan Koopman notes.

Another patient pause due in December

“As expected, unchanged policy from the Bank of England. In a 8-1 split vote, the MPC held the Bank rate at 5.00%. Only external member Dhingra dissented.”

“The majority view is that more cuts are needed, but at a gradual pace in order ‘not to cut interest rates too quickly, or too much’. The MPC believes there is a premium on patience. We think a 25bp cut in November is likely, before another patient pause in December.”

“The MPC also voted on the pace of gilt stock reduction for the 12 months ahead. It continues to proceed at a pace of GBP 100bn a year. That was also not a surprise. We don’t think this needs to be offset by lower policy rates.”