BoE in favour of holding UK interest rate

Bank of England rate-setters voted overwhelmingly to keep interest rates on hold at 5.75% in their first meeting since the Northern Rock banking crisis, it was revealed today.

The Bank’s Monetary Policy Committee (MPC) voted 8-1 in favour of the move despite calls for a quarter-point cut from committee member David Blanchflower, minutes of the meeting two weeks ago revealed.

The majority of members said an early cut would send a signal that the Bank was setting rates to ease struggling financial markets rather than fight inflation.

The minutes said: “It was possible that a cut in rates this month could be misinterpreted as a signal that monetary policy was focused on supporting the financial system and not on meeting the inflation target.”