The minutes for the Bank of England monetary policy comm- ittee’s April meeting reveal it is still split 6-3 on whether to raise interest rates, with Spencer Dale, Andrew Sentance and Martin Weale still pushing for a rise.
Sentance called for a 0.5 per cent increase while Dale and Weale wanted a 0.25 per cent rise. The remaining six voted for bank rate to stay at 0.5 per cent.
Sentance leaves the committee at the end of May and will be replaced by Goldman Sachs managing director Ben Broadbent at the start of June.
Eight members of the MPC voted to keep the bank’s programme of quantitative easing at £200bn but Adam Posen, who has called for the bank to increase QE before, wanted to see the programme increased by £50bn.
Henderson Global Investors chief economist Simon Ward says: “In February, the forecast the MPC made for inflation for two years time was 2.5 per cent, 0.5 per cent above the 2 per cent target, so interest rates need to be raised. It is not a question of if but when.
“It is difficult to see how they can produce the same target in May and not raise interest rates. But when Andrew Sentance leaves, it will be difficult to muster up a majority.”
Schroders European economist Azad Zangana says: “We think the first-quarter GDP release, due next week, will be disappointing so the MPC will want to wait until the Q2 data is released to consider raising rates.
“As August will be the month of the next but one inflation report, interest rates are more likely to rise then, or even later.”