Three policy members again vote for interest rate rise

| April 20, 2011 | 0 Comments

Minutes of the Bank of England’s April 6-7 meeting have been released today and have revealed the Monetary Policy Committee (MPC) again voted 6-3 to lift interest rates and 8-1 to restart the Bank’s quantitative easing (QE) scheme.

Adam Posen, again, called for an injection of £50 billion via the QE scheme to boost the economy.

For the third consecutive month, three policy members voted for an interest rate rise to combat stubbornly high inflation.

Andrew Sentance voted for a 50 basis point rise, while Martin Weale and Spencer Dale voted for a rise to 0.75%.

Mr Sentance has, since last June, voted for the base rate to be lifted.

However, last week, the Office for National Statistics (ONS) announced Consumer Price Inflation (CPI) eased to 4% in March, taking the pressure off the central bank to hike rates in the short-term.

The bank has been reluctant to lift rates as the recovery is losing momentum and many leading business groups suggest a premature interest rate hike could derail the economic recovery.

Meanwhile, the minutes said: “It was still too early to know whether the slowdown in growth toward the end of 2010 had been temporary or whether the weakness in the contemporary indicators of household spending heralded a more protracted weakness.”

Following the release of the minutes, sterling lost 0.3% against the US dollar at $1.6328.

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