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MPC Minutes: dissenting votes possible in August - RBS

FXStreet (Łódź) - The RBS team of analysts suggest that the minutes from the August BoE monetary policy meeting , due out next week, might reveal hawkish dissent from Ian McCafferty or Martin Weale.

Key quotes

"Our take remains that the August Inflation Report is 'marginally' more dovish than its May predecessor and, more significantly, more dovish than what it might have been had the MPC wanted to signal rising risks of a November 2014 rate hike."

"The CPI central projection was an average of 4bp lower across the policy-sensitive 2-3 yr forecast – a mildly dovish shift but not obviously one which would have been expected to trigger such a sharp re-pricing."

"In short, for a market which has doggedly tried to price-in an earlier BoE hike at every opportunity, this feels like a major volte-face and perhaps one which implies little expectation of any dissenting votes in August."

"Although we do not expect the first hike until February '15, we believe some dissent is more likely than not in August (Weale and McCafferty)."

"This is by no means a high-conviction call, but there were hints of rising dissent in the Inflation Report (eg, a 'wide range of views in August vs 'a range of views' in May)."

"In essence, this is a tactical rather than a strategic view: we do not expect more than two dissenters this side of November 2014 and probably not until into 2015."

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