Minutes show latest MPC interest rate vote at 7 to 2
by Elaine Frei
Minutes of the most recent meeting of the Monetary Policy Committee of the Bank of England were released Wednesday. They show that the committee’s vote on holding the interest rate at its current level was 7 to hold the rate steady to 2 votes to raise the interest rate by 25 basis points. The two committee members who voted to raise the rate, Tim Besley and Andrew Sentence, were shown to believe that the tightening moves made since August was “modest” in relation to how much inflation had risen. The rest of the committee believed it was a better idea to hold the rate and see what effect recent rate hikes had on demand.
The information contained in the minutes caused some analysts to rethink their expectation that the interest rate will be raised again in March. On the other hand, others pointed to the recent quarterly inflation report from the Bank that said inflation would remain above the 2 percent target if rates remain at their current level. The opinion expressed in the report as that more tightening of monetary policy would be necessary even though energy prices had come down.
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