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Policymakers split over interest rates
Posted by peopleperhour.com -
23/07/2008 13:18
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Most of Bank of England policymakers voted to keep rates unchanged at 5% at July’s meeting, but one voted for an interest rate rise and another for a cut.
The surprise split is the first one since May 2006 and shows the tough challenge faced by the Bank’s Monetary Polocy Committee (MPC) which is trying to bring the rising inflation under control and tackle the slowing growth at the same time.
Minutes of the meeting reveal that David Blanchflower wanted to reduce rates to 4.75% while Timothy Besley voted to raise the cost of borrowing to 5.25%.
Inflation in June had been higher than anticipated, according to the Bank, but there was evidence to suggest that growth was still continuing to slow. The MPC’s decision to keep interest rates at 5% came as no surprise to most but the three-way split, according to financial analysts, indicates that a rate cut in the near future is not widely anticipated. |
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