BoE voted 7-2 to hold rates on inflation dangers

In the minutes of its 5 and 6 March meeting, the BoE explained the balance of demand and inflation risks had “not changed sufficiently” to merit a rate change. The MPC cut rates in February by 25 basis points to 5.25% to help ease economic fears. Seven members of the committee, including Governor Mervyn King, believed back-to-back reductions could lead observers to think the MPC was focusing on downside risks to demand at the expense of the medium-term inflation. “That in turn could lead to an exaggerated response of the market yield curve to a rate reduction,” the minutes read. Howeve...