Flurry of activity behind the Old Lady's doors

Flurry of activity behind the Old Lady's doors

Behind the rather bland interest rate announcement that appears on newswires and the Bank of England's website at noon on the first or second Thursday of every month lies a picture of intense activity by the Bank's staff in the run-up to the meeting.

On the Friday morning before the meeting, the nine members of the monetary policy committee gather in the Bank's Threadneedle Street headquarters and are presented with huge amounts of economic data on everything from retail spending, to business surveys and house prices.

The Bank's regional agents come from around the country to brief them on what's going on outside the capital. They are in regular contact with about 8,000 businesses. All told, there are about 100 people in the room.The MPC is made up of five Bank staff - the governor, Mervyn King, his two deputies Rachel Lomax and Sir John Gieve, executive director Paul Tucker and chief economist Charlie Bean and four external members - Kate Barker, Andrew Sentance, Tim Besley and David "Danny" Blanchflower.

All are highly competent economists, all expected to make up their own minds on interest rates.

On the Wednesday afternoon of the two-day meeting, the nine begin their discussions proper, accompanied by five other people - four bank staff to take the minutes and a high-level representative from the Treasury, who is there to observe. The governor chairs the meeting under the watchful gaze of a great governor of the past - Montagu Norman......continued below

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Everyone sits in the same place each month with newcomers taking the chair vacated by his or her predecessor.

All the latest data are discussed in depth on the Wednesday but not interest rates - those are the subject for the next day.

The big day, Thursday, kicks off at 9am in the same room. King sums up the discussion so far then asks Lomax to speak. She speaks for about 10 minutes and says what her vote is. Then King asks the others at random to summarise their position in turn and vote. Most have five or six pages of notes they use. Some will say they want to vote when they have heard everyone else's views. But there is never an actual show of hands. King then asks for questions, gives his own speech, and votes last.

If the committee decides to make a statement explaining its decision, which it usually does if it moves rates, staff pass around ones they have prepared for every eventuality and the MPC members check, change or approve the one they want. It is then released to the media at noon with the rate decision. The minutes are released almost two weeks later.

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