Mervyn King, Rachel Lomax, John Gieve, Kate Barker, Charles Bean and Paul Tucker voted for the 0.25 per cent cut, Tim Besley and Andrew Sentence wanted rates to remain at 5.25 per cent and David Blanchflower wanted a 0.5 per cent cut.
The minutes show for the majority of members the outlook and the balance of risks around the MPC’s central projection for inflation warranted a 0.25 per cent reduction. They said such a cut would be consistent with market expectations of a gradual easing of bank rate and reduce the risk off a sharp slowdown in demand later in the year.
Blanchflower argued a larger reduction was required due to the worry of a marked slowdown in domestic activity based on forward looking surveys.
Arguing for no reduction, Besley and Sentence said inflationary pressures from rising output costs were spreading beyond the energy and food sectors and there was a danger higher inflation expectations would persist. They warned a cut might sustain higher inflation expectations.