BoE minutes give little away about future hike

All nine members of the Bank of England's Monetary Policy Committee voted to keep the interest rate on hold at 5% this month.

It was not an unpredicted outcome, so the split of views between members of the committee revealed by the minutes published yesterday was a disappointment to economists looking to see what the next few months might bring.

"Some members placed more weight on the news about upside risks from: money growth; investment, housing market developments and inflation expectations," the minutes said.

"Other members placed more weight on the potential downside risks from: the US's growth outlook as the housing market there slowed; the slack in the labour market and slower than average UK household consumption growth."

The MPC agreed inflation was still likely to ease in 2007 as the effect of high energy prices faded but were still worried the near-term rise could boost wage deals in the new year. They were all agreed to wait and see what impact the August and November rate hikes would have on the economy.

Economists say the next move in interest rates will now depend on the forthcoming pay round. If settlements at the turn of the year are not excessive then the MPC can be expected to hold off another rate rise.


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