Minutes from the Monetary Policy Committee (MPC) meeting for August show that for the second month running, there was a three way split on what to do with interest rates. Seven members voted to hold interest rates at 5%, while one supported a quarter-point rise and one voted to cut rates. The minutes also showed that the MPC is optimistic that the recent reductions in petrol prices could help reduce the pressure on inflation which jumped to over 4% last month. They labelled the fall in oil prices as key news which led to speculation that interest rates could be cut in November. With the economy weakening and growth forecasts being revised downwards figures from the Office of National Statistics showing wage increases at their weakest rate for five years will be welcomed by the bank. They feared that uncontrolled wage increases could prevent it from lowering interest rates. Further statistics from the Council of Mortgage Lenders showed mortgage lending for July showed a slight increase over June. However the estimated £24.8 billion was still 27% less than a year ago.
Bank of England