Bank Hardliner’s Switch Raises Interest Rate Cut Hopes

Hopes of further cuts in interest rates have been raised after it emerged that the keenest advocate of high rates at the Bank of England Monetary Policy Committee switched his vote to demand a cut in September.

Minutes of last month’s meeting, where rates were frozen at 7.5%, showed that while the MPC voted 7-2 in favour of a freeze, hardline “hawk” Willem Buiter switched his vote to a cut.

The news could signal a marked softening in attitudes at the MPC, which last week decided to cut rates by 0.25% (see Interest Rates Cut By 0.25%).