New retail sales figures for May have left the Bank of England's Monetary Policy Committee none the ...
New retail sales figures for May have left the Bank of England's Monetary Policy Committee none the wiser as to when to go ahead with the first increase in interest rates.
There was a big drop in UK consumer spending during that month, which has eased the pressure on the MPC to raise rates.
On Wednesday, the minutes from the MPC's meeting earlier this month showed the first vote in favour of raising rates since September last year.
However, retail price index figures released by the government on Tuesday showed that apart from the cost of buying houses, the prices of almost all categories of goods were rising at one of their slowest rates in the past 12 months, indicating that consumers were starting to restrict their spending.
The Bank of England is acutely aware of the possibility of a house price bubble developing, but the retail figures will be used as ammunition by the doves on the MPC who continue to argue that solid evidence of economic recovery is needed before raising rates in order not to nip emerging growth in the bud.
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