MPC considered 0.5% rate increase

In the minutes of the meeting, which was held on the 9 and 10 May, the MPC says it decided to increase interest rates by 0.25% to 5.5% in the light of the projections for May’s inflationary report. However, some members questioned whether there was a case for raising the rate by 0.5% given the upside risks to inflation over the medium term and the buoyant outlook for growth and demand. The minutes reveal that although the May inflation forecast implied a high probability of another rate rise later in the year, the MPC felt an increase of 0.5% in May would only have been justified if it...