Minutes of the Monetary Policy Committee’s July policy meeting published this morning show that, despite a vote to keep the interest rate steady for now, support for an impending rate increase is broadening.
Bank of England officials voted unanimously to keep the central bank’s benchmark interest rate steady, but their united front masks an increasingly lively debate over when to start raising borrowing costs.
All nine members of the panel voted to keep the BOE’s benchmark rate at its current low of 0.5% at the July policy meeting.
However, acccording to the minutes, for “a number” of officials the decision not to raise rates was a close call and it appeared that the debt crisis in Greece was “material factor” in voting to keep rates on hold.
Since the meeting, a third bailout agreement has been made with Greece which may go some way to offsetting fears of a crisis in Europe and pave the way for a small rate rise.
It is clear that both the Bank of England and the US Fed will be raising the rates soon; Janet Yellen has hinted that February may be the time for in increase in the US.
