Bank voted unanimously to raise rates

20 September 2006

Minutes from the Bank of England’s rates-setting committee – the MPC – show that members voted unanimously to keep the base rate on hold at 4.75% earlier this month.

The committee’s deliberations show that, following in-depth discussions, most members concluded that overall, the risks to the outlook for inflation remained broadly balanced.

Most financial analysts now believe there’ll be a further increase in rates between now and the middle of next year, to counteract the effects of inflation – which continues to run above the Government’s target. In August, the Bank raised the cost of borrowing for the first time in two years; to 4.75% from 4.5% – in an attempt to bring inflation in line with the Government’s 2% target. (Inflation is currently running at around 2.4%.)

Economists say that any further rise will depend on consumer spending and the strength of the housing market.