Prospects of late rate rise hit by ‘hawkish’ minutes
Bank of England policymakers have dampened hopes rates won’t rise next year after minutes of their latest meeting revealed increasing concern about the potential for rising inflation.
Members of the monetary policy committee (MPC) voted 7-2 to keep rates on hold at 0.5 per cent but the minutes revealed among the majority “there was a material spread of views on the balance of risks to the outlook”.
The slightly more “hawkish” than expected tone – days after HSBC economists suggested a rate rise could come as late as 2016 – helped the pound climb a cent against the dollar. Some of the MPC majority worry that should rates follow expectations of a rise towards the end of 2015, inflation could breach the Bank’s 2 per cent target. Members Martin Weale and Ian McCafferty voted for a rise.
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING