In its latest poll the IEA Shadow Monetary Policy Committee (SMPC) voted that UK Bank Rate should be reduced by a further 1 percentage point on 4th December. One SMPC member wanted a Bank Rate drop of 1.25%, four members favoured a cut of 1%, two argued for a 0.5% reduction, and two wanted to hold Bank Rate at the 3% set on 6th November.
These somewhat divergent recommendations would deliver a 1% reduction according to the voting procedures employed by the Monetary Policy Committee (MPC). Several members of the IEAs shadow committee were concerned about the size of the fiscal imbalances announced by Mr Darling. However, most SMPC members thought that the need to fight the meltdown in the financial sector and maintain a positive growth rate in the money holdings of the non-bank private sector had the greatest priority. Real concern was expressed about the low rate of growth of money supply (after adjustments for extraordinary items).