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| Version 1 | Version 2 |
|---|---|
| UK interest rates kept on hold at 0.25% | UK interest rates kept on hold at 0.25% |
| (35 minutes later) | |
| UK interest rates have been kept unchanged at 0.25% by the Bank of England's rate setting committee. | UK interest rates have been kept unchanged at 0.25% by the Bank of England's rate setting committee. |
| However, one of the nine who sit on the Monetary Policy Committee (MPC), Kristin Forbes, expressed concern about inflation and voted to raise rates. | However, one of the nine who sit on the Monetary Policy Committee (MPC), Kristin Forbes, expressed concern about inflation and voted to raise rates. |
| It was the first time since July last year that the vote to maintain rates had not been unanimous. | It was the first time since July last year that the vote to maintain rates had not been unanimous. |
| Analysts said it indicated the Bank of England could be closer to raising interest rates than they had thought. | |
| "The minutes paint a picture of a committee moving a lot closer to hiking rates than markets had realised," said Neil Wilson, markets analyst at ETX Capital. | |
| The Bank caught "markets off guard" as it "was expected to be a dud of a meeting," he added. | |
| The surprise was reflected in the currency markets, where the pound turned losses against the dollar into a 0.6% gain, to trade at $1.2357. | |
| The pound also gained ground against the euro, trading 0.7% higher at 1.1526 euros. | |
| The FTSE 100 index, which has recently been moving in opposition to the pound, eased back from its earlier record highs. Before the Bank's decision, the index had hit a mid-session high of 7,444. | |
| The Bank of England, led by governor Mark Carney, expects the UK economy to grow fairly briskly this year, at a rate of 2%. | |
| However, it then predicts a slowdown amid uncertainty surrounding the conditions of the country's withdrawal from the European Union. | |
| Against that uncertain background, many economists have predicted that the Bank will leave rates unchanged until at least 2019. | Against that uncertain background, many economists have predicted that the Bank will leave rates unchanged until at least 2019. |
| However, Ms Forbes, who is due to leave the MPC at the end of June, backed a rate rise on the grounds that inflation is "rising quickly and was likely to remain above target for at least three years". | However, Ms Forbes, who is due to leave the MPC at the end of June, backed a rate rise on the grounds that inflation is "rising quickly and was likely to remain above target for at least three years". |
| Latest official figures showed the UK's inflation rate rose to 1.8% in January, which is below the Bank's 2% target but the highest rate for two and a half years. | Latest official figures showed the UK's inflation rate rose to 1.8% in January, which is below the Bank's 2% target but the highest rate for two and a half years. |
| Hawkish tone | |
| The minutes from the MPC's latest meeting indicated some other committee members might also be close to voting for a rate rise. | The minutes from the MPC's latest meeting indicated some other committee members might also be close to voting for a rate rise. |
| The minutes said: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted." | The minutes said: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted." |
| The fall in the value of the pound since the vote to leave the EU has meant goods brought into the country are more expensive. | The fall in the value of the pound since the vote to leave the EU has meant goods brought into the country are more expensive. |
| Earlier on Thursday, the supermarket chain Sainsbury became the latest retailer to warn of the pressure to raise prices. | Earlier on Thursday, the supermarket chain Sainsbury became the latest retailer to warn of the pressure to raise prices. |
| Other MPC members noted consumers were turning more cautious amid slowing wage growth and rising prices. | Other MPC members noted consumers were turning more cautious amid slowing wage growth and rising prices. |
| On Wednesday, the US central bank voted to increase interest rates, its second recent move upwards. |