Mark Carney, once labeled an “unreliable boyfriend” by a lawmaker, can now blame Parliament for not being able to set a date.
The Bank of England governor plans to cut the number of Monetary Policy Committee meetings next year to eight from 12, but hasn’t said when those would take place. The delay is because Parliament hasn’t yet approved the change, though the central bank says it will provide more details next month.
The wait for confirmation has left investors and economists with a blind spot as Carney builds up to a mammoth transparency push involving the simultaneous publication of policy decisions and votes on Thursday. It also has the potential to complicate the market for financial contracts linked to MPC meeting dates as investors bet on an interest-rate increase next year.
“It’s not ideal,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “It’s not obvious why they can’t give us a provisional timetable. You already know the dates of half of those meetings, you only have to agree on four other dates. It’s not a lot to ask.”
Carney was slapped with the “unreliable boyfriend” tag by lawmaker Pat McFadden last year after the governor was criticized for backtracking on comments on the timing of an interest-rate increase. Markets are only fully pricing in a 25 basis-point increase by May.
The BOE has published a draft calendar for 2016, based on 12 meetings. Prime Minister David Cameron’s government is currently consulting on legislation to change the schedule that lawmakers will vote on this autumn.
Only once the bill passes Parliament -- which sits until Dec. 22 -- and then signed by the Queen, will a new eight-meeting calendar be legal. One reason the central bank hasn’t been more forthcoming is it doesn’t want to front-run lawmakers and give the impression officials consider it a done deal.
In a statement, the BOE said it’s “committed to ensuring that the public has sufficient warning of changes” to the MPC schedule and “will publish further details on this subject in September.”
“The proposed reduction in the number of MPC meetings is encapsulated in the Bank of England Bill, which Parliament will consider in due course,” it said. “Any reduction in the number of meetings therefore will depend on the passage of the bill in Parliament.”
In the meantime, economists, analysts and traders are left trying to work out which of the 12 meetings will be scrapped. The central bank says it plans eight decisions roughly evenly spaced, with one meeting about halfway between each quarterly Inflation Report.
The most likely option is that the BOE will keep the meetings in the four months of the Inflation Report -- February, May, August and November -- which contain the MPC’s forecasts and have tended to coincide with policy changes. They also benefit from the U.K.’s first estimate of quarterly economic growth published at the end of the previous month.
If that happens, January, April, July and October stand out as potential candidates to be dropped, according to Phil Rush, an economist at Nomura International Plc in London. Bringing forward the May meeting by a week would leave the remaining 2016 dates spread out by 42 or 49 days. All but one would take place within eight days of the Federal Reserve.
“I’ve had several questions on it this week alone” from colleagues and clients, Rush said. “I’ll let them know as soon as we do. Otherwise they just need to take a guess, essentially.”