Minutes of the Bank of England’s June meeting have been released today and have revealed that the Monetary Policy Committee (MPC) voted 7-1 earlier this month to keep interest rates at the historic low of 0.5% – where they have been since March 2009.
The usual nine-strong committee comprised of only eight members this month as Kate Barker’s term ended last month.
A new external member to the rate-setting committee will commence work on Monday 5 July – just in time for the next interest rate decision scheduled for 8 July.
However, the decision was expected to be unanimous but policymaker Andrew Sentance voted for rates to rise to 0.75% from their current historic low of 0.5%.
However, Mr Sentance did support his fellow members keeping the quantitative easing programme (QE) on hold.
QE, also known as printing money, is a process whereby the Treasury injects funds into the financial system to ease pressure on banks by giving them extra capital.
Mr Sentance’s view to raise rates comes as inflation remains well above its target of 2%. Consumer Price Inflation (CPI) rose to a 17-month high of 3.7% in April but has since fallen back to 3.4% in May.
The minutes said: “Despite current uncertainties, for this member, it was appropriate to begin to withdraw gradually some of the exceptional monetary stimulus provided by the easing in policy in late 2008 and 2009.
“Other members thought that changes to the balance of risks were insufficient to warrant a change in the stance of monetary policy.”
The pound rose 0.3% against the dollar to $1.4897 following the release of the minutes.