An imminent move in interest rates appeared unlikely today after it emerged seven out of eight Bank of England policymakers voted for no change this month.
Stephen Nickell remained the only member of the Bank’s Monetary Policy Committee (MPC) to vote for reducing rates to 4.25% from 4.5%, where they have been since August last year.
Mr Nickell was outgunned by the other members, who voted to leave rates on hold in light of steady growth in the UK economy, and amid fears that rising energy prices could put pressure on inflation, which is at 2%.
The MPC currently has eight members, pending the appointment of a replacement for Richard Lambert who left the committee last month to become the director general of the CBI.
Gavin Redknap, economist at Standard Chartered Bank, said it looked unlikely that rates would be altered in either direction in the near term, although he warned softer global activity and ongoing weakness in the consumer sector could yet prompt some modest easing later on in the year.
He added: “Notable for its absence this time was any particular concern over the consumer sector, with the Bank saying instead that asset prices should support demand going forward.”
However, James Knightley, an economist at ING, continued to predict a rate cut, potentially as soon as August, as “higher utility bills and taxes erode purchasing power and rising unemployment leads to softer confidence”.