Bank of England's MPC hawks are on the edge despite a dip into negative inflation
The Bank of England’s two rate-setting hawks have their finger on the trigger despite the UK’s brush with deflation this week, minutes of the latest policy meeting have revealed.
Inflation entered negative territory for the first time since 1960 in April, as prices fell minus 0.1% on a year earlier.
But for two members of the monetary policy committee, almost certainly Martin Weale and Ian McCafferty, a decision on whether to raise rates remains “finely balanced”, edging the pound higher.
The minutes of the meeting revealed a “range of views” on the MPC although the Bank is confident that a sustained period of falling prices will be avoided.
Rate-setters will also keep an eye on the housing market as more buyers than sellers could herald “upside risks to house prices in the second half of 2015”.
IHS Global Insight’s Howard Archer said: “The minutes appear to reinforce the view that the Bank will start inching interest rates up during the first half of 2016.
Archer added: “It currently looks a very close call as to whether the Bank acts in the first or second quarter.”
