BoE committee split three ways on interest rate

The Bank of England’s dilemma between inflation fears and staving off a slowdown was highlighted today after rate-setters split three ways for the first time in nearly two years.

Minutes of the Bank’s Monetary Policy Committee meeting two weeks ago revealed that six of its nine members voted for a quarter-point interest rate cut to 5%.

But two members voted to keep rates unchanged due to inflation pressure from soaring oil costs, while another – David Blanchflower – called for a 0.5% cut due to fears over a sharper than expected slowdown.

The three-way split is the MPC’s first since May 2006.

The committee is walking a tightrope between balancing the risks to the economy with its mandate to keep inflation at 2%.

The official measure of inflation, the Consumer Prices Index, is currently above target at 2.5%.