MPC split fuels prospect of interest rates rise

The Advertiser Series: The split vote was the first under the BoE governorship of Mark Carney The split vote was the first under the BoE governorship of Mark Carney

TWO members of the Bank of England's Monetary Policy Committee voted to raise interest in August, the first time in three years policymakers have backed a rise.

The split decision is the first under governor Mark Carney's tenure.

Minutes of the last MPC meeting showed that Ian McCafferty and Martin Weale voted for a 25 basis point rise in interest rates.

These members noted that the continuing rapid fall in unemployment, alongside survey evidence of tightening in the labour market created a prospect that wage growth would pick up.

The MPC voted 7-2 to hold interest rates from their historic low of 0.5%.

The pound jumped in expectation of an earlier rate rise than first thought.

Sterling rose 0.20% against the US dollar to $1.66.

If follows official data on Tuesday which showed inflation fell to 1.6% in July.

It is the first time there has been a split on the MPC since July 2011.

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10:41am Wed 20 Aug 14

calumannabel says...

All the articles on property prices cite demand for London properties as being the driving force in the housing market whilst price rises in the north east region are slowest in the UK. Surely the answer is to have different mortgage rates for properties within the M25 and staggered rates for different regions by postcode. Or is this too simple a solution to stop rising house prices and cool the market? This way north easterners wouldn't be penalised by foreign investors invading London and forcing up demand for property there.
All the articles on property prices cite demand for London properties as being the driving force in the housing market whilst price rises in the north east region are slowest in the UK. Surely the answer is to have different mortgage rates for properties within the M25 and staggered rates for different regions by postcode. Or is this too simple a solution to stop rising house prices and cool the market? This way north easterners wouldn't be penalised by foreign investors invading London and forcing up demand for property there. calumannabel
  • Score: 1

11:45am Wed 20 Aug 14

gramps427 says...

They need to look carefully at the data again as to whether the increase in employment is more down to short term summer jobs and of course the date which shows the current stagnation in wages. Be interesting to know who these guys work for.
They need to look carefully at the data again as to whether the increase in employment is more down to short term summer jobs and of course the date which shows the current stagnation in wages. Be interesting to know who these guys work for. gramps427
  • Score: 1

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