MNI BOE Preview - August 2024: First cut now or later?

• We have characterised the August rate decision as 50/50 for some time due to a number of factors – a lack of communication from the MPC (due to the election and the pre-meeting blackout periods), a changing composition of the MPC (with Lombardelli replacing Broadbent) and some inconclusive data.
• We have made no updates to our subjective hawk-dove spectrum of MPC members since publishing our BOE Review following the June meeting. Then we assigned around a 60% probability that Pill votes for unchanged rates and around a 60% probability that Lombardelli votes for a 25bp cut. Assuming Bailey and Breeden also vote for a cut, this would deliver a 5-4 vote in favour of a cut.
• We discuss the possibilities for all MPC members' voting outcomes, look in detail at hotel prices and how they are collated (and in our view how they should be ignored), look ahead to the MPR projections and also analzye how the guidance could change.

MNI BoE Preview - Aug24.pdf