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Shadow Mpc Votes 7-2 To Hold Rates

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On this occasion, seven SMPC members voted to hold rates in June, while two SMPC members voted to raise rates by ¼%. Looking further ahead, four SMPC members expressed a bias to raise the official REPO rate, while one thought the next move should be downwards. The wider economic background is discussed in more detail in the quarterly SMPC minutes. The last quarterly meeting was held on Thursday 20 April and was written up in last month’s extended SMPC release, while the next will be held at the IEA on Tuesday 18 July

at 6:00pm, and will be released on the Sunday ahead of the 3 August MPC announcement.

http://www.economicsuk.com/blog/000340.html

Comment by Roger Bootle (Economic Adviser, Deloitte)

Vote: No change

The case for an immediate cut in interest rates has all but evaporated.

Comment by Professor Tim Congdon

(Visiting Fellow, London School of Economics)

Vote: Raise REPO rate by ¼%

High money supply growth is still being recorded.

Interest rates are going up and soon!

Comment by Professor Kent Matthews

(Cardiff Business School, Cardiff University)

Vote: No change

Rapid monetary growth could undermine MPC credibility

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How have past SMPC votes correlated with the decisions made by the actual MPC. I haven't followed the SMPC votes, so can't comment on whether the SMPC voting as it did really means all that much. Can you give more details on history?

Billy Shears

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How have past SMPC votes correlated with the decisions made by the actual MPC. I haven't followed the SMPC votes, so can't comment on whether the SMPC voting as it did really means all that much. Can you give more details on history?

Billy Shears

For example, here's May:

Shadow MPC votes 7-2 for unchanged rates

Posted by David Smith at 10:59 AM

Category: Independently-submitted research

The results of the latest Shadow Monetary Policy Committee (SMPC) quarterly meeting (in conjunction with the Sunday Times) are set out below. The rate recommendations are made with respect to the Bank of England’s REPO rate decision to be announced on Thursday 4 May. On this occasion, seven SMPC members voted to hold rates, while two voted for a ¼% reduction.

It was also 7-2, but this time two voted for a cut.

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For example, here's May:

It was also 7-2, but this time two voted for a cut.

Yes. That shows that the SMPC has moved significantly in the direction of a rate rise rather than a cut. But has there been any correlation between SMPC voting and MPC voting in the past? Is the SMPC biased one way or another? Do their votes accurately predict MPC votes, or are they all over the place?

Billy Shears

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The question is, will Kate Barker (or Mervyn) join David Walton this month? Also, there's a new American guy - we've no idea how dovish/hawkish he could be. I'd say as a new member he's likely to go with the consensus and vote for no change. But if Mervyn starts talking about a rise .....

IMO the vote could be anywhere between: 8-1 and 5-4 for a hold. The latter would send shockwaves. Can't really see a hike this month.

Yes. That shows that the SMPC has moved significantly in the direction of a rate rise rather than a cut. But has there been any correlation between SMPC voting and MPC voting in the past? Is the SMPC biased one way or another? Do their votes accurately predict MPC votes, or are they all over the place?

Billy Shears

Well both MPC and SMPC are a panel of economists (largely academics). So, yes, there is/has been a correlation.

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The question is, will Kate Barker (or Mervyn) join David Walton this month? Also, there's a new American guy - we've no idea how dovish/hawkish he could be. I'd say as a new member he's likely to go with the consensus and vote for no change. But if Mervyn starts talking about a rise .....

IMO the vote could be anywhere between: 8-1 and 5-4 for a hold. The latter would send shockwaves. Can't really see a hike this month.

Well both MPC and SMPC are a panel of economists (largely academics). So, yes, there is/has been a correlation.

I reckon King will join Walton this month. Barker is a difficult one to call however. The new dude is difficult to call but there is a good chance for 4 votes for a rise.

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I doubt Merv will be on a loosing vote like he was last August. I think that was a significant signal that the rate cut was the wrong thing to do. Also when he was asked if the rate cut was the right thing to do, he likened it to a game of football saying you don't look at previous matches, so they need not look back (like that makes sense).

I think merv will vote for a hold, with some more tough tighening talk. More members will probably vote for an increase. All IMHO.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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