BoE Minutes: MPC voted 2-7 to hike rates

FXStreet (Łódź) - BoE Minutes from the MPC monetary policy meeting held on 6 and 7 August and released today reveal that the Committee voted 7-2 in favor of maintaining the interest rate at the record low of 0.5% and unanimously opted for keeping the program of asset purchases steady at £375 billion. This outcome is against the general expectation of an unanimous vote for staying on hold.

Ian McCafferty and Martin Weale were the MPC members who preferred to increase the interest rate by 25 basis points to 0.75%, arguing that robust UK economic growth justified a hike, which should be carried out before wage pressures emerge due to lags in monetary policy.

On the other hand the remaining seven MPC members didn't see an early rate rise justified by the current UK inflation projections and suggested such a move could result in further strength of the sterling which could impede rebalancing of the economy.

This is the first time since 2011 that MPC members were not unanimous on rates.

GBP/USD rose to 1.6676 after the release of the minutes.