London no longer has a monopoly on the central bank's rate-setting stage! The Bank of England is about to head "north" to Leeds, with the market betting on a return to rate hikes in November.

From Threadneedle Street to Leeds, the Bank of England's interest rate decisions will no longer always be made in London. Apart from remote meetings during the COVID-19 pandemic, since the Bank of England gained monetary policy independence, its rate-setters have gathered in London every time they meet to make decisions. Starting next year, the "Old Lady of Threadneedle Street" will have London and Leeds share this responsibility. In line with the current political mood, the nine members of the Monetary Policy Committee will head north to the Bank of England's office in the West Yorkshire city of Leeds, where they will finalize interest rate decisions through discussion, opening a new chapter for the 332-year-old central bank. According to a person familiar with the discussions, the MPC's first meeting in the north could be scheduled as early as December, but is more likely to coincide with the vote on March 18 next year. The MPC's decision to embark on this symbolic journey comes as Prime Minister Andy Burnham pushes to shift the policy focus toward northern England, including establishing a "No. 10 North office" in Manchester, where he served as mayor for nearly a decade. However, the Bank of England's ties to Leeds date back a long way, having first opened a branch there in 1827. In 2021, when Burnham becoming prime minister was still a distant prospect for most British voters, the Bank of England announced plans to establish a northern hub, and two years later moved into larger offices, with the goal of expanding its team to 500 by 2027. Earlier this week, the Bank of England said it will move into new offices at Capitol House in Bond Court in 2028, continuing its plan to have one-tenth of its staff working in the city. Under the plans, the MPC will only meet in Leeds during rate decision meetings that do not coincide with the release of full economic forecasts, as meetings with full forecasts require more briefings from London office staff. The MPC meets eight times a year, four of which include the release of new forecasts. MPC members regularly travel around the country to learn about the economy from businesses and other contacts, supplementing the information they receive through the central bank's network of regional representatives. Until now, however, rate decisions have only been made in the committee room of the Bank of England's listed historic building in the City of London. Bank of England Governor Andrew Bailey said when announcing the new office arrangements this week that it is "an important milestone in our long-term commitment to the city." Labour's West Yorkshire Mayor Tracy Brabin said the decision is "a strong endorsement of our 'Northern financial city' and shows national confidence in the future of our region's economy." As it adapts to the current political climate, the nine members of the Monetary Policy Committee will head north to the Bank of England's office in the West Yorkshire city of Leeds, where they will finalize interest rate decisions through discussion, opening a new chapter for this 332-year-old central bank. According to a person familiar with the discussions, the MPC's first meeting in the north could be scheduled as early as December, but is more likely to coincide with the vote on March 18 next year. The central bank's latest move can be seen as dovetailing with the Bank of England's long-term plan to expand its northern office presence, helping to strengthen its ties with regional businesses, talent and economic activity. As of September 22, sterling was at about 1.3366 against the dollar, near a two-month low; earlier, Federal Reserve rate hikes and signals of further tightening supported the dollar, while the Bank of England remained temporarily on hold. It is understood that money market traders are currently pricing in about a 65% probability that the Bank of England will return to rate hikes in November, and have priced in a cumulative four increases of 25 basis points each through the end of 2027. The common thread among major central banks recently has been to prevent persistent price shocks from turning into broader and more lasting inflation, while adjusting the intensity of policy according to their respective economic conditions. On September 16, the Federal Reserve unanimously decided to raise rates by 25 basis points, lifting the target range for the federal funds rate to 3.75%-4.00%, based on its judgment that domestic demand, capital investment and employment remain resilient while inflation is still elevated. The European Central Bank announced a 25 basis point rate hike on September 10, raising the deposit facility rate to 2.50%, focusing on addressing persistent energy inflation caused by the Middle East conflict. The Bank of Japan, meanwhile, approved a rate hike by a 7-2 vote on September 18, raising its policy rate to 1.25%, effective September 24; the yen's depreciation, rising prices for energy and some AI-related goods, and the pass-through of wage costs into selling prices together increased its attention to upside inflation risks. The Bank of England has taken a more cautious pace: its decision published on September 17 showed that the Monetary Policy Committee voted 6-3 to keep rates at 3.75%, with the other three members favoring a 25 basis point hike. UK inflation rebounded to 3.1% in August, but the labor market remains weak, and there has not yet been an obvious second-round inflation effect in wage and price setting, so most members chose to continue observing. From the perspective of policy transmission, rate hikes mainly work by restraining demand and stabilizing inflation expectations, preventing energy price increases from becoming further entrenched in sustained rises in wages and services prices; differences in each country's economic capacity to bear costs, the speed of cost pass-through and financial conditions determine the differences in the pace of this round of anti-inflation action. From Threadneedle Street to Leeds, the Bank of England's interest rate decisions will no longer always be made in London. Apart from remote meetings during the COVID-19 pandemic, since the Bank of England gained monetary policy independence, its rate-setters have gathered in London every time they meet to make decisions. Starting next year, the "Old Lady of Threadneedle Street" will have London and Leeds share this responsibility. In line with the current political mood, the nine members of the Monetary Policy Committee will head north to the Bank of England's office in the West Yorkshire city of Leeds, where they will finalize interest rate decisions through discussion, opening a new chapter for the 332-year-old central bank. According to a person familiar with the discussions, the MPC's first meeting in the north could be scheduled as early as December, but is more likely to coincide with the vote on March 18 next year. The MPC's decision to embark on this symbolic journey comes as Prime Minister Andy Burnham pushes to shift the policy focus toward northern England, including establishing a "No. 10 North office" in Manchester, where he served as mayor for nearly a decade. However, the Bank of England's ties to Leeds date back a long way, having first opened a branch there in 1827. In 2021, when Burnham becoming prime minister was still a distant prospect for most British voters, the Bank of England announced plans to establish a northern hub, and two years later moved into larger offices, with the goal of expanding its team to 500 by 2027. Earlier this week, the Bank of England said it will move into new offices at Capitol House in Bond Court in 2028, continuing its plan to have one-tenth of its staff working in the city. Under the plans, the MPC will only meet in Leeds during rate decision meetings that do not coincide with the release of full economic forecasts, as meetings with full forecasts require more briefings from London office staff. The MPC meets eight times a year, four of which include the release of new forecasts. MPC members regularly travel around the country to learn about the economy from businesses and other contacts, supplementing the information they receive through the central bank's network of regional representatives. Until now, however, rate decisions have only been made in the committee room of the Bank of England's listed historic building in the City of London. Bank of England Governor Andrew Bailey said when announcing the new office arrangements this week that it is "an important milestone in our long-term commitment to the city." Labour's West Yorkshire Mayor Tracy Brabin said the decision is "a strong endorsement of our 'Northern financial city' and shows national confidence in the future of our region's economy."