Members of the Bank of England’s Monetary Policy Committee (MPC) voted 8-1 to cut rates from 2 per cent to 1.5 per cent earlier this month, it has been revealed. David Branchflower was the only rebel, who was instead in favour of a full point cut. The decision by the Bank of England means that interest rates are now at their lowest level in the Bank’s 315 year history, following four successive months of rate cuts .
The Minutes of the January meeting also reveal that the MPG considered leaving interest rates unchanged at 2 per cent. However, it was decided that ‘the markets had priced in a cut of 50 basis points and either leaving Bank rate unchanged this month, or implementing a larger-than-expected cut, could damage confidence further in both financial markets and the real economy. Weighing these arguments together, most members concluded that a cut in Bank rate of 50 basis points was appropriate. However they did not want to surprise the market or undermine confidence.’
The MPC now face a decision whether to cut rates further in February, following claims from manufacturers’ association EEF that this month’s cut was too timid.
Bank of England Members Voted 8-1 in Favour of Cut
Financial Services > e-banking > Banking news
Bank of England Members Voted 8-1 in Favour of Cut
Wed, 21 Jan 2009
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