The vote saw 2 in favour, 7 against, in the vote for a UK interest rate hike.
The argument was over the effect of the euro zone on the UK economy. The Monetary Policy Committee meeting minutes, announced today, gave a mixed view of the need to increase the key interest rate by 25 basis points.
The majority vote of seven members, including Governor Mark Carney, opted to keep the interest rate at its 0.5 percent low, maintained since 2009. They did so due to concerns over the effects that euro zone growth has had specifically on UK economic growth. They admitted that growth is slackening citing the slowdown in the housing market, but qualified this by stating that it was slowing to “a more sustainable pace”.
The two who voted for change, Martin Weale and Ian McCafferty, wanted to increase with the argument that the UK economy has not felt the damage from the euro zone “financial contagion” and that keeping the interest rate at current level for too long risked “unbalancing the recovery”.
GBPUSD – declined after the minutes were announced to 1.6024, repairing slightly to 1.6052 (-0.39%) at 11.50am GMT.
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