Bank of England's MPC stance is shifting: hawkish members are becoming isolated.
Thursday's 6-3 vote to raise rates—driven by concern over an Iran-related energy
shock—masks a broader migration toward dovishness among other MPC members,
notably deputy governors Lombard and Ramsden. Both had warned of second-round
inflation from higher energy, but those concerns are easing as growth softens
and firms curb hiring. Markets now see a majority consensus to keep rates
unchanged unless inflation risks re-emerge; Ramsden said if the conflict eases
and domestic price pressures continue to fall the Bank may resume its previously
paused rate-cut process, while Lombard said current support for a hold is not
"close to a tipping point." Analysts say the hawk–dove boundary is being redrawn
and the bar for further hikes has risen; rate markets price only one possible
hike this year.
