Two dissenters in the MPC: Martin Weale and Ian McCafferty voted for a rate hike. The 7:2 vote in the 9 strong Monetary Policy is a big change: it is the first time that somebody votes against Governor Mark Carney. This vote raises the chances of an early rate hike, perhaps as early as November. There was speculation that the minutes would reveal that one or more members had voted for a rate hike already at this August meeting. Martin Weale was singled out as a candidate for voting against the majority.
GBP/USD was emerging from the lows towards the publication. It touched 1.66 earlier and stood on 1.6630 in the second before the event. The British pound is moving higher, with cable standing at 1.6670 at the moment– more coming —
Slack was falling, according to some members while most members see merit in waiting longer for more evidence on rises in salaries. The dissenters want to raise rates before wage pressures appear. They base their argument on monetary policy lags.
Regarding the Asset Purchase Facility (aka the QE program), the unanimous vote was maintained.
Carney gave us a small hint about the vote by saying there is a variety of opinions.
The US dollar has been on a roll across the board, with EUR/USD falling to an 11 month low. Yet this has also been a story of the pound: the weakness of inflation numbers in the UK yesterday.
Here is how it looks on the chart:
