Monetary policy committee hints that an increase could be on the way sooner than expected
According to the latest report, only one of the nine members of the monetary policy committee (MPC) voted to increase rates at its March meeting.
The news came as a surprise - not one of the economists questioned in a Reuters poll had dissented from the consensus view that all the rate-setters would vote for the status quo.
To boot, the minutes also revealed that several other MPC members had said it would not take much for them to follow suit in voting for an increase soon.
"Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted," it said.
Investor bets on rates going up as soon as early 2018, from a prevailing view of no earlier than 2019, have risen to around 50 per cent, Reuters adds.
But Larry Elliott in The Guardian argues a rates hike will not come as soon as this analysis of the minutes might suggest.
First, he says, noted rates hawk Kristen Forbes is leaving the committee in June, making it harder to get to the five needed to force a change in policy.
Added to that, Bank of England officials take up five of the nine places on the committee and tend to vote with governor Mark Carney, who has repeatedly sounded a cautious note on the UK economy's progress ahead of Brexit.
Finally, Elliott says, while inflation is set to rise as a result of the falling pound, it is not being accompanied by wage rises and so there is little danger of an inflationary spiral that will necessitate central bank intervention.
He concludes: "With wage growth nugatory and Brexit talks about to begin, the City's much-anticipated rate rise is still a way off. It certainly won't happen this year."
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