Rather, because of the elevated level of uncertainty we are currently facing, the MPC feels a particularly strong need to reassess the balance of risks at every meeting. Consequently, monetary policy decisions, now more than ever, have to be data-dependent.
The most recent decision of the MPC appeared to surprise domestic money markets somewhat, as they had come to discount a 25 basis points rate cut in the wake of the July move. We prefer not to surprise markets. In fact, we see policy transparency and consistency as crucial in ensuring an effective transmission of rate decisions to the economy.