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Signs emerge of three-way split among rate setters

Money

There are signs of a three-way split emerging on the Monetary Policy Committee, with one member suggesting that monetary policy could be loosened even further. While minutes of the February meeting showed MPC members voted unanimously to keep rates and asset purchases on hold, the details point to greater divergence in outlook than the 9-0 vote suggests. The records noted that for two members the immediate decision remained 'finely balanced' but that 'there could well be a case for an increase in bank rate later in the year'. Conversely, one member felt that 'the next change in the stance of monetary policy was roughly as likely to be a loosening as a tightening'. But all members were recorded as saying it was 'more likely than not' that rates would 'increase over the next three years'. Martin Beck, senior economic adviser to the EY Item Club, said there was a 'mixed tone' in the minutes, adding 'the divisions among the MPC which appeared to have diminished in light of January's unanimous vote, may be re-emerging'.

 

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