One member of the Bank of England’s Monetary Policy Committee has voted for a rate rise, marking the first split this year.
In the latest minutes from the Bank of England, released in what is being called “Super Thursday”, Ian McCafferty voted in favour of a rate rise in the Bank’s August meeting. Prior to the minutes’ release most economists had been expecting a 7-2 split.
The last time the committee split was in December last year when both Mr McCafferty and Martin Weale voted in favour of a 25 basis point raise rise.
This is the 77th straight month the UK central bank has voted to keep interest rates at the historic low of 0.5 per cent.
Samuel Tombs, senior UK economist at Capital Economics, said “It would not be surprising if one or two more MPC members join Ian McCafferty in the coming months - the minutes emphasied that ‘some members’ saw upside risks to the inflation forecast.”
However, Mr Tombs predicted a rate rise will not occur until Spring of next year.
The BoE also kept its level of asset purchases at the same level.
Elsewhere the bank raised its growth forecasts for this year and cut its inflation projection. The MPC now expects the economy to grow 2.8 per cent this year, higher than its May forecast.
However, the Bank also halved its forecasts for inflation in 2015 from 0.6 per cent to 0.3 per cent on the back of falling oil prices and the prolonged strength of sterling.
This was the first time the monthly rate decision and the minutes of the MPC meeting were released together, without the normal fortnightly gap.
