BoE Minutes Preview
We expect the August BoE Minutes to show yet another split 1-7-1 vote, with Besley arguing for a hike. Although yesterday, Besley stated in a newspaper interview that “All being well, inflation will fall again next year and will be much closer to the two percent target by the end of 2009″, which could suggest that he voted with the majority in favour of a steady rate. Meanwhile, ultra-dove Blanchflower should continued to have favoured a rate cut. The August Inflation Report was less hawkish than market players had expected and there is likely to be MPC members not agreeing with the Report’s inflation outlook, which included CPI below target in 2 years time as its main scenario.