Three MPC members vote for rate rise in February

by Aaron Strutt

Feb 25 2011

Three members of the Monetary Policy Committee voted for a Bank base rate rise in February, minutes from the meeting show.

Spence Dale joined Martin Weale in voting for a rise of 0.25% while Andrew Sentence voted for a 0.5% rise. The governor of the Bank of England, Mervyn King, voted to keep rates on hold along with the other six members.

A rate rise does look like it will happen sooner, rather than later, but some think that the economy is still too weak after figures announced by the Office of National Statistics revealed that gross domestic product fell by 0.6% in the last three months of 2010.

ING economist James Knightley told the BBC: “The government spending was the only positive growth driver. This is fairly worrying given we know about the wave of fiscal austerity that is now starting to hit the UK economy, meaning that we will soon be starting to see negative figures for this component.”

Meanwhile Vicky Redwood, an analyst from Capital Economics, said: “The slight downward revision might give the more hawkishly inclined members of the MPC reason to pause for thought.”

The Chancellor George Osborne previously blamed the snow for the fall in growth but it is clear that this wasn't the only factor.

February 25, 2011