However, despite the likelihood of the MPC voting for an interest rate rise early next year receding, the meeting revealed that a rise could be getting closer.
Regarding Bank Rate, seven members of the Committee voted in favour of the proposition, but Ian McCafferty and Martin Weale voted against the proposition, preferring to increase Bank Rate by 25 basis points.
For McCafferty and Weale, economic circumstances were sufficient to justify an immediate rise in Bank Rate, stating that keeping the Bank Rate at its current level for too long risked unbalancing the recovery.
In the meeting, they argued that inflation was 'well below the target, partly the effect of the higher exchange rate and lower raw materials prices.'
In the judgement of these members, even after a rise of 25 basis points in Bank Rate, monetary policy would remain extremely supportive, and an early rise would facilitate the Committee’s aspiration that any subsequent rises in Bank Rate should be only gradual. The remaining committee members warned that 'premature tightening in monetary policy might leave the economy vulnerable to shocks.'
