General Discussion and Whimsical Banter

Ocelot

slinger2 said:

Voting is perhaps a sign that there won't be many rates cuts, if any, in the coming months

Hope you're right.

alfred64

Needed to vote twice to arrive at the decision so was in the balance.
Next vote 18 Sept. The way things are going with inflation rates may have bottomed out

masonic

It will be interesting to see how the fixed rate market reacts to the events today. The pound moved counter to what would have been expected from a cut, suggesting markets are revising future rate expectations upward following the dissent.

s71hj

alfred64 said:

Needed to vote twice to arrive at the decision so was in the balance.
Next vote 18 Sept. The way things are going with inflation rates may have bottomed out

It was always a majority for a cut. One voted for half point but switched to quarter point to break the deadlock 

alfred64

Yes, I know. but governor was humming and hawing before he voted to cut rate and both his deputy and the chief economist voted against him, so some significant opposition to the reduction.

Bobziz

A hawkish cut, which is reportedly why the pound immediately strengthened. 

InvesterJones

Bobziz said:

A hawkish cut, which is reportedly why the pound immediately strengthened. 

It was also the comments which showed they expect inflation to be raised to 4%, which indicated they won't cut again soon, which strengthened the pound.

SnowMan

I never realised that the annual headline CPI inflation figures were calculated to the nearest 0.1% from the CPI indices using 3 decimal places, rather than the more commonly published CPI indices to 1 decimal place

So July 2025 CPI is 3.8% (= 138.955/133.830 - 1 rounded to the nearest 0.1%) and not 3.9% (= 139.0/133.8 - 1 rounded to the nearest 0.1%).

Normally they give the same answer whether you use 1 DP or 3 DP but not this month. 

Learn something every day!

LHW99

I thought in maths you normally only rounded the answer to a calculation?

You can easily lose accuracy if you round the inputs.

SnowMan

LHW99 said:

I thought in maths you normally only rounded the answer to a calculation?

You can easily lose accuracy if you round the inputs.

That's an argument for quoting the CPI index itself to 3 decimal places, but it's almost always shown to 1 decimal place. It means the 12 month CPI can't be calculated from the CPI index itself (at least the main 1 DP version) which doesn't have a good feel to it. But it is what it is.  

There's a difference between accuracy and spurious accuracy. Some might say quoting the CPI to more than 1 DP is spurious given the subjectivity in devising the methodology used to calculate it.