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Bank of England unanimous on keeping interest rates low

Created: 02/18/2015 8:52 AM WHEC.com
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LONDON (AP) — Bank of England policymakers voted unanimously this month to keep interest rates at record lows and to refrain from pumping more money into the British economy, according to minutes of the bank's last meeting released Wednesday.

Minutes of the Feb. 4-5 gathering of the bank's Monetary Policy Committee show that with inflation at record lows, there is little impetus to increase rates from 0.5 percent. Inflation now stands at 0.3 percent, held down by low oil prices and supermarket price wars.

Capital Economics economist Vicky Redwood said the nine policymakers are more divided about their next move on interest rates than the unanimous vote would suggest.

Two members — Martin Weale and Ian McCafferty — may soon reinstate their previous call for a rate hike, she said.

The bank acknowledged that there were differences among policymakers.

"For two members, the immediate policy decision remained finely balanced: given the outlook for inflation beyond the short term, there could well be a case for an increase in Bank Rate later in the year," the minutes said. "All members viewed it as more likely than not that Bank Rate would increase over the next three years; for one member, the next change in the stance of monetary policy was roughly as likely to be a loosening as a tightening."

Whenever the bank decides to raise interest rates, it expects to do so "gradually and more slowly than in previous cycles," according to the minutes.

(Copyright 2015 by The Associated Press. All Rights Reserved.)



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