Unsurprisingly, my MPC and ECB models signal no change in rates at today’s meetings but both are consistent with an easing bias.

The MPC-ometer suggests either a 5-4 vote for unchanged rates (four votes for a 25 bp cut) or 6-2-1 (two votes for 25 bp, one vote for 50 bp – no prizes). Key contributors to the dovish forecast are the downward revision to second-quarter GDP, a fall in price expectations in the EU consumer survey and lower short-term gilt yields. Partially offsetting these factors are the weak exchange rate and higher share prices.

One caveat: the actual vote has been less dovish than the model’s predictions recently. However, historically it has sometimes been early in picking up shifts in the MPC’s thinking.

For comparison, the Sunday Times Shadow MPC has voted 7-2 for unchanged rates (two votes for a 50 bp cut).

The ECB-ometer, which signalled July’s 25 bp rise, is now suggesting a one-third chance of a cut. Factors contributing to the dovish swing include weak business and consumer surveys, a slight decline in inflation, slowing M3 growth and a fall in short-term bond yields.

With policy tightened only two months ago, officials are understandably reluctant to concede that incoming data now warrant an easing bias. However, there may be some minor changes to the language in today’s policy statement to the effect that either upside inflation risks have diminished slightly or – more likely – downside growth risks have increased.