Bank Rate will remain at 4% after the Monetary Policy Committee voted five to four to keep it there, narrowly defeating a proposal to reduce it to 3.75%. Britain’s most expensive room of adults has achieved the sort of result usually associated with deciding whether the office heating is actually on.
Four members wanted a cut. The other five preferred to hold. The country was therefore spared a quarter point of excitement and handed a fresh facial expression from every mortgage spreadsheet in the land.
The Bank judged that inflation had peaked while growth remained subdued. This has left the economy in the unusual position of being allowed to deteriorate gradually, provided it does so in a manner compatible with the forecast.
At the Office of National Brow Furrowing, deputy governor Mavis Coupon said the decision reflected a difficult balance. “Inflation has peaked,” she said. “But we cannot move until the evidence has stopped behaving like evidence and settled into something more legally binding.”
The committee said the risks had become more balanced, which is central bank language for placing two contradictory worries on opposite sides of a scale and asking them to remain there until December.
One group feared inflation might prove persistent. Another feared weak demand might become the main event. Both groups were united in the belief that the answer was somewhere inside a chart, although nobody could agree whether it was the line going up, the line going down or the one labelled uncertainty in a font designed to discourage questions.
Chief Minutes Polisher Derek Abacus praised the restraint. “We have kept Bank Rate at 4%,” he said. “We will wait for more evidence before acting. Ideally, it will arrive in a folder, identify itself at reception and contain no graphs with arrows.”
The rejected quarter point has now been issued a visitor’s badge and placed outside the meeting room. It has been told that it may come in when inflation, growth and the labour market have all agreed what they are doing. Until then, the biscuit plate remains the committee’s only policy with a clear direction.
Real story: Bank of England.
