Bank of England rate decision: the MPC vote and sterling futures

What the announcement contains

The MPC sets Bank Rate to meet the government's 2% inflation target. At each announcement it publishes the decision, a Monetary Policy Summary and the minutes of the meeting, including how each member voted. Four times a year the announcement comes with the Monetary Policy Report, which carries the Bank's forecasts.

Because the vote of each member is published immediately, the split is part of the news. A decision taken by a narrow majority, or with members voting for moves in opposite directions, tells the market more about the next meetings than the rate itself.

What moves sterling on the day

• The decision against market pricing.
• The vote split: how many members voted for a larger move, for no change, or for a move in the other direction.
• Guidance in the summary on the pace of future changes.
• In Monetary Policy Report rounds, the inflation and growth projections and the press conference.
• UK inflation data, especially services inflation, released in the weeks before the meeting set the context.

Timing seen from the US

12:00 in London is 7:00 a.m. Eastern and 6:00 a.m. Chicago when both countries are on summer or winter time. The UK changes its clocks on the same dates as the rest of Europe, the US on different dates, so for a few weeks in March and around late October and early November the announcement comes one hour later in US time. The release falls during the US overnight session for index futures and during active London trading for sterling.

Order flow in 6B

British pound futures on CME are less liquid than the spot sterling market, so the book is thinner than in 6E and the reaction per contract can be larger. Before noon London, the inside levels of the 6B book often thin; at the announcement, the first bursts reflect both the decision and the vote count, which are read within seconds of each other. A reaction that reverses after the first minute can reflect the market weighing an unexpected vote split against an expected decision.

Afterwards, the useful reading is whether 6B holds the new level into the US morning, when US participants add volume, or drifts back into its pre-announcement range.

In Senzoukria

Bank of England rows appear in the News calendar under GB, which is off by default; enable it in the Countries filter. Rows naming the Bank of England or the BoE are described as “BoE policy — GBP + gilts driver.” For rows naming the Official Bank Rate, the Quant mode card files them under Monetary policy and lists 6B and GC. With the 6B preset chosen in the news wire, the headline filter uses the MACRO and ECB tags.

The News terminal's top strip shows the London session clock and whether that session is open, which helps place a noon release in the day of each market.