Analysts have been surprised by recent MPC minutes which reveal the committee was split three ways over the decision to cut interest rates to 5% this month.
It had been predicted the committee would vote 9-0 in favour of a cut but two members, Tim Besley and Andrew Sentance, wanted to keep rates on hold at 5.25%. Their colleague David Blanchflower voted for a larger cut to 4.75%. The minutes also showed the difficulty the Bank of England is facing trying to tackle inflation in the face of a wider economic slowdown. “A 25 basis point reduction now would be consistent with market expectations of a gradual easing of Bank Rate, which had been informed both by the February Inflation Report and by subsequent communications by Committee membe...
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