Members of MPC edging towards a rate rise

A number of Bank of England rate-setters are moving towards voting for the first increase in borrowing costs in over eight years, adding to expectations of a split among policymakers in August.

All nine members of the BoE’s Monetary Policy Committee voted on July 8 to leave rates at a record low of 0.5 per cent, as they have done since January, minutes of the meeting showed yesterday.

For all of them, the deepening crisis in Greece and China’s financial market volatility meant the decision was “clear cut”.

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But the central bank said that if Greece had not been a factor, “a number” of policymakers would have found the decision not to raise rates more finely balanced than before. In June, just two policymakers described their decision similarly.

Since the MPC met two weeks ago, the risk of a Greek exit from the eurozone has diminished.

“Absent that uncertainty, the decision between holding Bank rate at its current level versus a small increase was becoming more finely balanced,” the minutes said.

Economists said three of the MPC’s nine members might vote for a rate hike in August, getting the ball rolling for a majority to back an increase later this year or in early 2016.

BoE Governor Mark Carney has suggested that a hike may come around the end of the year.