Why the Bank changed its mind

UK - Mervyn King will have some explaining to do when he presents the Bank of England's inflation report next week writes the FT in London, 3 August.

The deputy governor once said that monetary policy should create no surprises. But yesterday's quarter-point interest rate cut to 5 per cent sent a minor shock wave through the City of London as analysts raced to revise their predictions.

Last month the Bank's monetary policy committee voted 8-1 to hold its rate unchanged and indicated in the minutes

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