Following its latest meeting the IEA Shadow Monetary Policy Committee (SMPC) narrowly voted to leave Bank Rate unchanged on Thursday 8th May. In particular, five members of the shadow committee voted for rates to remain on hold, while four members voted to cut the official interest rate. The advocates of a rate cut were divided, with two wanting a 0.25% reduction and two a cut of 0.5%.
Members also stressed the importance of non-interest-rate measures in the current circumstances (indeed, some such measures were introduced shortly after the meeting). There was general agreement that the Bank of England should provide liquidity to the markets. However, members stressed the crucial importance of mopping up liquidity after the crisis was over, in order to avoid the severe inflationary problems that have appeared after some previous financial markets shocks.