Bank changes may bring interest rate cut closer

With the imminent departure of Sir Andrew Large from the Bank of England at the end of the month, the interest rate-setting monetary policy committee will lose its most hawkish member. Number-crunching by the City firm Lehman Brothers on the voting records at every meeting since the MPC was set up in 1997 shows that Sir Andrew has consistently wanted a tougher stance than the average member - nine times either calling for rates to be raised when the committee wanted them to be left on hold or voting for no change when the majority voted for cheaper money.

The fact that Sir Andrew has also been one of the most active MPC members, supporting a move in rates at a third of the meetings he attended, means that the committee could well become more dovish without him, Lehman argues, although that depends on the attitude of his replacement, Sir John Gieve.

If Sir John falls into line with the average Bank insider, who tends to take a tougher stance than the four outside experts appointed by Gordon Brown, the difference may be modest.

Overall, Lehman finds that the MPC has become less activist over the years, but that the outside members have been more likely to dissent from the consensus. In the past, when one member has dissented, as Steve Nickell did when calling for a rate cut in December, the chances of a move the following month increased. That didn't happen last week, but Lehman says that, if the minutes show that Kate Barker or Charles Bean joined Nickell in last week's vote, the statistical chances of a cut in February would be almost 50%.