Have minutes helped markets to predict the MPC's monetary policy decisions?

- Are the minutes of the MPC informative for markets?
- An Ordered Probit model forecasts interest rates.
- Vuong tests compare the model on two different days.
- Before and after the publication of the MPC minutes
- MPC minutes have influenced markets when forming their expectations.

This paper examines whether the minutes of the Bank of England's Monetary Policy Committee (MPC) have provided markets with additional information about the future course of monetary policy. The paper conducts an econometric approach based on an Ordered Probit model explaining future policy rate changes (sample 1998 to 2014), and the Vuong test for model selection, which helps to identify changes in the market assessment around the release of MPC minutes. Our results suggest that the Bank of England's published minutes of the MPC's deliberations have indeed helped markets in forming their expectations on future monetary policy decisions.