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News: Interest rate hold was not unanimous

The Bank of England’s Monetary Policy Committee, which held interest rates at 4.5% on December 8th, was not in total agreement about the decision, their minutes released this morning show.

One of the nine members, Stephen Nickell, wanted to cut rates to 4.25% because he thought that inflation was likely to undershoot its 2.0% target in the medium term.

A number of pointers had suggested the November inflation report profile had seemed optimistic but most members thought it was too soon to make a decision, particularly in respect of oil prices and tax increases feeding into wages.

"For example, it was too soon to be confident that the oil price had peaked, and it was unclear how the gas price would evolve in the coming months," the minutes said. "It was also too early to conclude that there would be no wage response to the past pickup in inflation."

The minutes are likely to boost predictions of an early cut to interest rates as analysts had predicted a unanimous vote.

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