Members of the rate-setting Monetary Policy Committee (MPC) were split three ways for the second consecutive month before opting to leave the base rate unchanged at 5% in July, MPC minutes reveal.
For the second time, Professor Tim Besley was the sole member of the Bank of England group convinced an immediate rise in interest rates was necessary to help keep “inflation expectations anchored to the target”. Headline inflation surged last month to 4.4%, more than twice the MPC’s object rate. Besley’s backing for a rate increase was only the second time an MPC member had voted for a base rate increase in more than a year. Conversely, David Blanchflower again backed a cut of 25 basis points, arguing there was a greater risk of undershooting the inflation target in the medium term due t...
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