BoE's 2 policy makers vote to raise interest rate

GMT 01:53 2014 Thursday ,21 August

Arab Today, arab today BoE's 2 policy makers vote to raise interest rate

Bank of England
London - XINHUA

 Two out of the nine-member Monetary Policy Committee (MPC) of Bank of England (BoE) have voted to raise benchmark interest rate, according the central bank's meeting minutes published on Wednesday.
It is the first opinion split of the MPC in more than three years.
The BoE announced on August 7 after a two-day meeting that Bank Rate would stay at 0.5 percent and the stock of asset purchases, or quantitative easing policy, at 375 billion pounds (or 625 billion U.S. dollars).
In the meeting minutes, the MPC said external members Ian McCafferty and Martin Weale voted against the proposition, preferring to increase Bank Rate by 25 basis points, or 0.25 percent, to 0.75 percent while the other seven members voted in favor of maintaining the ultra-low interest rate.
The two members believed that the economic circumstances were "sufficient to justify an immediate rise in Bank Rate".
"These members noted that the continuing rapid fall in unemployment alongside survey evidence of tightening in the labor market created a prospect that wage growth would pick up," said the minutes.
They also argued that it was possible that wages were lagging developments in the labour market to some extent. If that were true, wages might not start to rise until spare capacity in the labour market were fully used up, the minutes said.
British unemployment rate dropped to 6.4 percent in the three-month to June 2014, down from 6.5 percent in the three-month to May, and recording the lowest level since late 2008, data showed by the Office for National Statistics (ONS) last week.
Meanwhile, in the same period, British employees' total pay was 0.2 percent lower than a year earlier, with pay excluding bonuses was merely 0.6 percent higher, data also showed.
Regarding the stock of purchased assets, the Committee voted unanimously in favor of maintaining the current scale, said the minutes.

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