In its latest monthly E-mail poll the IEA Shadow Monetary Policy Committee (SMPC) voted by seven votes to two to leave UK Bank Rate unchanged at its current 5.25% on Thursday 6th March. The two dissenters from the majority vote both wanted to cut the official discount rate by 0.25% (to 5%) on this occasion.
Looking further ahead, both the SMPC rate cutters had a bias towards further rate reductions, while three of the holders had a neutral bias thereafter, two had a bias to cut, one was prepared to cut - but only if the credit crunch worsened - and one hold had a bias to tighten. Virtually all the SMPC members involved expressed concern about the problems that had arisen in the global market for credit, but a number also pointed out that the putative UK recession appeared to be everywhere, apart from in many of the official statistics for the domestic economy. There was also a substantial minority who felt that earlier policy mistakes, which had meant that UK monetary policy had been too lax for too long, meant that a further reduction in Bank Rate was not appropriate.