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Other: BoE Minutes surprise with one vote for rate cut

Other: BoE Minutes surprise with one vote for rate cut

In the UK, the Minutes of the March meeting showed a surprise voting outcome, as the two dissenters in favour of higher rates of the February meeting voted this time to keep rates unchanged, while one other member voted for a rate cut. The swing from a rate hike to a cut came as a complete surprise, but it may be too early to conclude that a rate hike is now completely off the table. Inflation remains elevated and surprised on the upside in February, something that was not yet incorporated in the March discussions. As such, the statement of the MPC that ???the short-term outlook for inflation was now a little lower than in the February report??™ may have to be revised at the next meeting in April. Therefore, a rate hike at the April or more likely May meeting in concordance with the publication of the new inflation report is still our central scenario. It??™s nevertheless important to note that the MPC sounded confident that wage growth will remain moderate, as it stated that ???initial recorded outturns for recent wage settlements showed that the upside risk to inflation from wage growth might have started to diminish??™. This may signal that one more rate hike will be sufficient to keep inflation at its target in the medium term.