You are here: Home - Uncategorized -

MPC still split 6-3 over rate rise

Written by:

The Monetary Policy Committee (MPC) remained split 6-3 against a rate rise for the second month, with opinion divided on how to tackle soaring inflation without snuffing out growth.

Spencer Dale and Martin Weale repeated their calls to immediately increase the Bank Rate by 25 basis points. Andrew Sentance again argued for a 0.5% rise, according to the March meeting minutes published today.

Governor Mervyn King, deputy Paul Tucker and four other members voted to hold rates at their historic low of 0.5% in a repeat of the previous month’s decision.

Meanwhile, eight members of the MPC again opted to maintain QE at £200bn, with Adam Posen calling for it to be increased by a further £50bn.

The continued division within the MPC over how best to curb rising inflation – which jumped a further 0.4% to 4.4% in February – while encourgaing growth comes ahead of the Budget later today.

Office for National Statistics (ONS) figures show the UK Consumer Prices Index (CPI) annual rate of inflation rose to 4.4%, up from 4% in January and more than double the Bank’s target of 2%.

The Retail Price Index (RPI), measuring the cost of high street prices on goods such as fuel and clothes pushed up to 5.5% from 5.1% in January.

A rate rise would dampen inflation but could also derail growth.

Governor Mervyn King said soaring oil prices are to blame for the jump in the cost of living, and argues a rate rise would have no effect on this and other external factors, the minutes note.

Chancellor George Osborne will today seek to reassure the country Britain is fully on the path to a sustainable recovery in what is being dubbed his ‘Budget for Growth’.

Related Posts


Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Sentance worried inflation could rise above 5%

Andrew Sentance has predicted inflation could rise above 5% this year and repeated his calls for a gradual increase in...