23 Jan, 2008
Minutes from the January Monetary Policy
Committee meeting reveal a near anonymous decision to freeze the
rate at 5.5%.
Only David Blancheflower voted against the motion, suggesting a cut
was necessary to counteract the worsening of global demand and the
increased risk of sharp and persistent slowdown.
The minutes reveal the rate was maintained in order to avoid the
impression that the MPC was more concerned with stabilizing demand
than meeting its inflation target.
The next MPC decision will be made on February 7.
In response the Centre for Business and Economic Research says:
"Whilst there was no immediate need for a cut the Committee
members raised a number risks to the economy in 2008.
"We do not expect inflation to prevent a 0.25% in February,
the likelihood of which is increased by fears of recession in the
US and the Fed's surprise 0.75% cut yesterday.
"However we can expect a far more conservative approach to
cutting rates from the Bank of England with a 0.5% cut unlikely
following the stronger than expected GDP figures for the fourth
quarter that were released today."