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Minutes of the Bank of England’s monetary policy committee meeting earlier this month were out yesterday and showed Deputy Governor Andrew Large was the only member wanting a rise in rates.
Large had wanted an immediate quarter-point rate rise but was outvoted by the rest of the monetary policy committee who opted to leave rates steady at 4.0 percent.
Although the MPC thought a raise would “help to discourage unsustainable rates of house price inflation", most members decided to wait for next month’s inflation report, which would provide a clearer picture to "evaluate the mixed economic news and reconsider some of the unresolved economic issues, such as the reasons for the pick-up in house prices".
Committee member Richard Lambert said later that the outlook for the housing market is the biggest domestic uncertainty facing policymakers right now, reports Reuters today. One argument advanced for raising interest rates this month before they were left at 4.0 percent was that it might slow the housing market.
Despite the decisive vote in favour of a freeze, most analysts still believe the bank will raise rates in May. The MPC observed that the economy was still growing above trend and with little capacity, it would be appropriate to raise interest rates “in due course".
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