A June hold as
expected, and indeed not even a change in the number of votes for a cut – just
two out of the nine-member committee. But it was a close-run thing.

Buried in the minutes
of the committee there were signals of a significant change in tone, and a building
majority for a cut on 1 August.

This is new news, especially because members
of the interest rate-setting committee have been in a general election media
blackout.

The seven members who
voted for a hold are now split between hawks and doves. The latter believe
that the decision even this month was “finely balanced”.

Crucially they are
playing down signs from the data that service sector inflation still looks
sticky, suggesting it reflects one-off factors such as the rise
in the national living wage and bills that automatically rise by inflation,
such as broadband and mobile.

So this group, which appears to include the key
Bank of England leadership, is playing down the strength of underlying inflationary
pressures.

This would be enough for a majority to cut rates, although this was
the last meeting for deputy governor Ben Broadbent, who will be replaced by
Clare Lombardelli in August.

While not a done deal,
this language shows a clear signal to the markets and the public that after the Bank completes its new forecasts for the economy, a cut is now the most likely
outcome at its next rates meeting in August.