Spatial Voting: Evidence for the Bank of

The transparency and openness of the monetary policymaking process at the Bank of England has provided very detailed information on both the decisions of individual members of the Monetary Policy Committee and the information on which they are based. In this pa-per we consider this decision making process in the context of a model in which ination forecast targeting is used but there is heterogeneity among the members of the committee. We \u85nd that rational partisan theory can explain spatial voting behaviour under forecast uncertainty about the output gap. Internally generated forecasts of output and market generated expectations of medium term ination provide the best description of discrete changes in interest rates, in combination with uncertainty in the macroeconomic environment. There is also a role for developments in asset housing and labour markets. Further, spatial voting patterns clearly di¤erentiates between internal and ex-ternally appointed members of the Monetary Policy Committee. The results have important implications for committee design and the con-duct of monetary policy