As expected, the Bank of England MPC kept rates on hold at 4.75% at this week’s meeting. The vote was split 6-3, with three dissenters voting for a 25bp cut, Rabobank’s Senior Macro Strategist Stefan Koopman notes.

Path of least resistance remains for quarterly cuts

“We interpret this larger vote split as a signal to the market that the MPC is advocating a more rapid pace of cuts than currently priced in.”

“The MPC also stuck to its language of gradualism. In our view, the path of least resistance remains for quarterly cuts.”

“With three members already favoring cuts, only two more need to switch sides in February to mark the next move. We continue to expect the first cut of 2025 to land then.”