SMPC votes for 0.25% rate cut but narrowly rejects 0.5% cut - December 2007

SMPC votes for 0.25% rate cut by five votes to four

At the December 2007 meeting of the SMPC four members voted to leave Bank Rate unchanged on 6 December, while five members voted for a reduction. Somewhat unusually, the rate cutters were split, however, with three wanting a reduction of 0.5%, but one wanting a cut of 0.25%, and another a more aggressive cut of 0.75%. Voting on rate cuts incrementally, a 0.25% cut was accepted by five votes to four and a 0.5% cut was rejected by five votes to four. All of the SMPC members were aware of the uncertainties created by the global credit crunch and the associated danger that this could lead to a sudden cracking of the robust UK economic conditions reported for the third quarter of this year, when much of the official data expires.

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