The Bank of England governor invited members to vote on the proposition that the repo rate should be maintained at 4.75 per cent.
Eight members of the committee - the governor, Rachel Lomax, Kate Barker, Charles Bean, Marian Bell, Richard Lambert, Stephen Nickell and Paul Tucker – voted in favour. Andrew Large voted against, preferring a rise in the repo rate of 25 basis points.
Paul Tucker, who had voted for a rise in rates at the previous two meetings, was persuaded by the evidence to change his view and support the other seven members in leaving rates unchanged.
Tucker, executive director for markets at the Bank of England, has also now been re-appointed for a further three-year term as a member of the MPC with effect from 1 June 2005.
However, Marian Bell is yet to be re-appointed, and it is thought that if she left, this could affect the outcome of further interest rate decisions.
Ray Boulger, senior technical manager at John Charcol, commented: “Bell has almost always been in the majority camp and has been helpful in maintaining the right level of interest rates so if she left this may upset the balance. Her replacement may be the same, worse, but probably not any better.”
But Peter Charles, chief economist at Mortgage Express, said: “It seems very unlikely now that we will see a further rise in interest rates in this cycle.
“But the MPC is going to be relatively cautious about cutting rates. When rates are cut we might see cuts of 50 to 75 basis points over three or four months.”
