The minutes of this month’s meeting of the Bank of England Monetary Policy Committee showed they had been unanimous in deciding to leave interest rates unchanged at 4.5 percent after two successive quarter-point rises in May and June.

The minutes said there were a number of reasons for the decision but one of them was the first cautious signs of a housing market slowdown. "There had been further tentative signs of a slowdown in the housing market although house prices were above the level envisaged in the May Inflation Report projections," the minutes said.

The Committee, however, thought that other arguments for keeping rates unchanged were more persuasive:

“First, the May Inflation Report central projection, based on the market yield curve, was for inflation to be below target for most of the forecast period, only rising slightly above target at the end.”

“Since the recent increases in the repo rate reflected a movement at least as fast as that implied by the May market curve, there was no argument for a third successive rise. Indeed, there was a risk that an unexpected rate increase, in the absence of significant news on the month, might prompt an unwarranted re-evaluation of the Committee’s strategy by market participants.”

“Second, the August Inflation Report would provide an opportunity to evaluate the news since May more fully in the context of producing a new forecast and to consider further some key economic issues, such as the recent and prospective pattern of consumption and the pressure of government demand on resources.”