United call to keep rates on hold

Ian McCafferty and Martin Weale, pictured, had argued for rate rise
Ian McCafferty and Martin Weale, pictured, had argued for rate rise
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Bank of England policy­makers appear more united in their determination to keep a lid on interest rates as they reflect on lower inflation and falling oil prices.

Minutes of the December meeting of the central bank’s monetary policy committee – published yesterday – showed that the majority of members thought the weak outlook for inflation ­warranted keeping rates on hold at their record low of 0.5 per cent.

Ian McCafferty and Martin Weale, who have voted for a rate increase since August, continued to argue that below target ­inflation was largely the result of a higher exchange rate and lower raw material prices.

Policymakers noted that oil prices had fallen much more sharply than they had expected, meaning consumer inflation – currently at 1 per cent – was likely to remain lower than ­previously thought in the short term.

The minutes showed that different members saw different risks, but they did not repeat November’s language of there being a “material spread of views”, which had caused analysts to believe that some policy­makers were edging closer ­towards raising rates.

IHS Global Insight economist Howard Archer said: “The December minutes are likely to ­reinforce the belief that the Bank will not be raising rates before late-2015, and could very well wait until 2016.”

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