The Bank of England’s Monetary Policy Committee has sent the clearest signal yet that rates are likely to come down soon.

The minutes of the July MPC meeting published yesterday reveal a 5:4 split in favour of keeping the interest rate on hold. In previous meetings only one, and occasionally two, members had voted for a cut.

When the Governor invited the committee to vote on the proposition that the repo rate should be maintained at 4.75%, five members of the Committee (the Governor, Rachel Lomax, Andrew Large, Richard Lambert and Paul Tucker) voted in favour. Four members (Kate Barker, Charles Bean, Stephen Nickell and David Walton) voted against, preferring a reduction in the repo rate of 0.25%.

The four argued that the downside risks for household spending were greater than previously thought; the labour market appeared to be softening; survey-based measures of cost and price pressures had eased; and the overall risks that inflation would be below target in the medium term had risen.

Early action, they said, "would reduce the risk that greater changes in the policy rate would be needed at some point in the future".

It’s also clear from the minutes that the bomb attacks on London, although not clear at the time, were not going to alter members’ considerations. The minutes show the "… decision on interest rates was reached solely on the economic merits, and no committee member argued that it should be altered to reflect unfolding events."