The deputy governor responsible for financial stability, Andrew Large, was the only member to vote for a rise of 0.25 per cent. The rate has been held at 3.75 per cent since the last quarter point rise in November 2003.
On balance, the committee’s vote reflected the positive market conditions in evidence since the start of the year with house price growth still exceeding expectation and consumption growing steadily.
The committee considered the continuing weakness of the dollar against the euro a ‘key uncertainty’, but most members agreed there was little reason to increase rates this month.
George Johns, economist for The Woolwich, said: "The Committee will face a tough dilemma over the next few months. If the MPC wants to raise rates sooner rather than later, it will have to deliberately overlook its inflation target. We think they will indeed do this next month and increase the base rate by 0.25 per cent to 4 per cent.”
