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MPC Split Over Rate Decision

As reported by us recently, following the cut in interest rates made at the beginning of this month there were many who thought that further cuts were on the cards for the rest of the year. The recently published minutes from the MPC (Monetary Policy Committee) meeting in which this cut was decided upon would suggest the opposite however.

The minutes reveal that the vote for a cut in rates was five to four in favour, the closest possible vote from the committee of nine people charged with making setting the base rate of interest on a monthly interval. Being such a close run thing indicates that further cuts, at least before the end of this year, look unlikely – something that is supported by the committee stating that it does not believe a succession of cuts are necessary in order to meet the inflation target of 2% set by the Government.

Stability seems to be on the cards for the near future at least, with the MPC split over recent decisions it seems that balancing inflation against the pressures of the retail sector and housing market is a challenge, and historically they tend to ‘wait and see’ for as long as they can.