The Bank of England’s monetary policy committee (MPC) was divided over whether to raise the interest rate in June, according to minutes released today.
Four of the nine members of the MPC voted for a further rise of a quarter per cent, which would have taken the base rate to 5.75 per cent.
A key point of their reasoning was that inflation is still higher than optimum levels and is best tackled sooner rather than later.
High lending and consumer spending were also highlighted as compelling reasons to increase the base rate.
A higher base rate would particularly impact mortgage borrowers, credit card
holders and people taking out small loans
The five members that voted against a raise argued that the May rate rise had already provided sufficient dampening measures which need time to filter through.
Significantly, Bank of England governor Mervyn King voted for a rise, placing him in the minority group of a split MPC for the first-time in two years.
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