View more on these topics

MPC were split over July base rate freeze

Monetary Policy Committee members were divided over their interest rate decision this month even though the majority voted to freeze interest rates.

The MPC’s decision to hold rates at 5 per cent was backed by seven members of the committee, with one member voting for a rise and one for a cut in the base rate.

Tim Besley wanted to increase interest rates by 0.25 per cent so as to send a strong message about the committee’s intention to curb inflation.

The MPC’s minutes show that while Besley acknowledged the impact of the energy shock and credit crunch, he felt an immediate increase in the base rate was needed to keep medium-term inflation expectations anchored and ensure the committee’s credibility in light of the current and prospective increase in CPI inflation.

David Blanchflower voted for a 0.25 per cent cut in the base rate in order to avoid inflation undershooting the target in the medium term.

The majority of members judged that the risks to inflation in the medium term were most likely to be balanced by maintaining the base rate at 5 per cent this month.

Recommended

A shaw thing

Annie Shaw is a freelance financial journalist
All things must pass and this column has reached the end of its useful life. It would be churlish not to mention my final fling on behalf of the Shaws. Between two days of continuous summer downpours, I spent a gloriously sunny day at Newmarket as a guest of fund manager T Bailey in the presence of PRs Martin Stott and Kirsty Wiser. Lanson Ladies’ Day at Newmarket’s July course provided a fitting finale for this column.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com