The Bank of England's monetary policy committee (MPC) voted 6-3 to leave interest rates unchanged at its policy meeting earlier this month. According to the minutes of the MPC meeting on 4/5 June, three outside advisors, Kate Barker, Marian Bell, and Steve Nickell, all voted to lower rates. At the previous month's meeting, the MPC voted by a narrow 5-4 against cutting rates. Arguing for a rate cut in June, the doves said the news on the world economy was "if anything weighted to the downside" and warned that "short-term downside risks to output seemed to be crystallising in the UK".
But the majority said sterling's stability at a lower level was "upside news for inflation over the medium term". Other factors supporting no change included a faster than expected pace for house price inflation, which indicated that "it was now less likely that there would be an abrupt price correction in the housing market". The majority also cited risks to further feeding the household debt boom by cutting interest rates. Meanwhile, UK consumption growth was "perhaps slowing less rapidly than projected". //www.fxcentre.com