Only from the Bank of England can you get a hawkish 25bps rate cut accompanied by two dissents for an upsized, half-point reduction.

The vote split from the BoE on Thursday was 5-4. Two members — Alan Taylor and, obviously, Swati Dhingra — wanted a 50bps cut, while chief economist Huw Pill and Catherine Mann (who, just three months ago, was voting with Dhingra for a super-sized blast of easing) voted for no change.

I’d hate to be in charge of herding these cats: “Ok, good morning everyone, is there any chance — any at all — that I’m going to get something which looks like consensus today, or are we doing the 5-4 thing again?”

Thursday’s move was the fourth of what’s been an overtly wary cutting cycle.

For the uninitiated, vote splits are part of it over there (“over there” meaning in London). I wouldn’t describe myself as a “BoE watcher,” per se, but I do cover every meeting, and have for some years now. The merits of their process — dissents, needlessly wordy statements, minutes released on the same day as the decision and comically laborious quarterly reports — are debatable if you ask me. “TMI,” as the kids might put it. “Too much information.”

A 5-4 split on a 25bps rate cut where the dissents are in opposing directions suggests, pretty much by definition, that i) you don’t know what you’re doing, ii) the environment’s hopelessly indeterminate or iii) both. In this case, it’s iii). Both. And has been since the pandemic.

The new inflation forecasts (in the May MPC report) were broadly consistent with those from the last update in February. That’s a win on its own for the BoE which… well, let’s just say the outlook’s been subject to dramatic revisions at various intervals since 2020. The figure below, one of my personal favorites, shows the history of BoE inflation forecast revisions going back four years.

There are two takeaways. First, the BoE hasn’t had a clue in a very long time. To be fair, that’s as forgivable as it can be given that the UK was among the hardest-hit G7 economies both by the pandemic and the war in Ukraine. Also, the BoE was grappling with a post-Brexit domestic political reality which, by late summer of 2022, had devolved into abject farce, culminating in a short-lived debt crisis.

The second takeaway from the updated inflation outlook is that although the May projections are slightly more benign than the February forecasts, the “bump” in Q3’s still there (white arrow). Some of that’s just base effects and “the math,” so to speak, but it underscores the challenges the bank faces at a time when the growth outlook’s cloudy. Remember: The BoE has a single mandate. Statutorily anyway, price stability’s all that matters.

But the bank still wants (and needs) to keep the growth ship afloat. So you get plenty of color on GDP and unemployment. “Underlying UK growth is judged to have slowed since the middle of 2024, and the labor market has continued to loosen,” the bank said Thursday, adding that “uncertainty surrounding global trade policies has intensified since the imposition of tariffs by the United States and the measures taken in response by some of its trading partners.”

Donald Trump was poised to unveil a trade pact with the UK on Thursday in what’ll be an overblown non-event. Trump likes the Brits. They’ve got a thing for pomp and ceremony, and still have a royal family, which Trump thinks is pretty damn cool. As far as I can tell, it’s completely lost on him that America exists because a handful of treasonous settlers high on John Locke decided to revolt against the Crown. And, let’s face it, they would’ve murdered a royal or two were they not an ocean away.

Anyway, Trump pitched a bilateral trade accord with Keir Starmer as some manner of landmark “deal,” which isn’t even close to true. The UK barely got a slap on the wrist during Trump’s star-crossed “Liberation Day” unveil last month, and by comparison to the China issue, markets simply don’t care about US-UK trade. I don’t want to call it immaterial but there it is.

“The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the UK for many years to come,” Trump declared. “Because of our long-time history and allegiance together, it is a great honor to have the UK as our FIRST announcement.”

You can’t help but laugh. The only reason the US-UK special relationship needs “cementing” is because Trump’s spent every day since January sowing doubt about alliances that no one even thought to question prior to his second term. Further, and to the point above about the Crown, Trump doesn’t have the faintest about the most important chapter of America’s “long-time history” with the UK.

Critically, the forward guidance in the new BoE statement retained the hawkish slant, where that means the bank reiterated that its approach to removing policy restriction will proceed in “a gradual and careful” fashion. Some expected the BoE to drop that language given the deteriorating growth outlook in light of the tariffs. By retaining it, they effectively tapped the brakes on traders who suspected the bank might be inclined to pull forward future easing.

That brings us full circle. Between the retention of the “gradual and careful” language and the dissents for no change, this was a hawkish 25bps cut. Albeit one packaged with two dissents for a super-sized reduction. Only from the BoE.