Bank of England Rate Decision

What sets the Bank of England's announcement apart is the vote. The Monetary Policy Committee has nine members: the Governor, three Deputy Governors, the Chief Economist and four external members appointed by the Chancellor. Each casts an individual vote on Bank Rate, and the split is published immediately alongside the decision. An outcome of five to four in one direction can say more than the decision itself about where policy is heading.

The committee's remit, set by the government, is to meet an inflation target in consumer prices while supporting the government's broader economic objectives. Its decision and the minutes of the meeting are released together at noon, in a document titled the Monetary Policy Summary. At four of the eight meetings a full Monetary Policy Report is published with updated forecasts and a press conference led by the Governor. Sterling and gilt yields, especially at the short end, usually take the first reaction; the FTSE 100, dominated by overseas earners, often moves inversely to the pound.

Market expectations are built from sterling overnight index swaps, and the Bank's communications have at times been judged less predictable than the Fed's, leading to larger surprises on the day. Members speak publicly between meetings, and the external members in particular often voice independent views.

Beyond Bank Rate, the MPC decides the pace at which it reduces its stock of gilts bought under quantitative easing, including active sales. The annual decision on that pace has itself become a market event for long-dated gilts.