The Bank of England decided to hold interest rates at 0.25 per cent today despite concerns over rising inflation.
But in a surprise move three of the eight monetary policy committee members who vote on the decision called for a hike to 0.5 per cent to contain rising prices.
Official figures this week showed the consumer prices index measure of inflation jumping to 2.9 per cent in May – well above the 2 per cent rate that the Bank is charged by the Government to target.
The Bank of England has decided to hold interest rates at 0.25 per cent despite concerns over rising inflation.
It was for this reason that MPC members Ian McCafferty and Michael Saunders joined outgoing rate-setter Kristin Forbes in voting for a rise to 0.5 per cent, marking the first time that three members have dissented for more than six years.
The pound surged a cent on the dollar to 1.279 and two-thirds of a cent on the euro to 1.146 after the shock vote as currency traders laid bets that rate rises will come sooner than 2019 as previously thought.
The announcement comes as the latest data on the economy highlighted the dilemma facing the Bank’s rate-setters.
Retail sales were reported by the ONS to have dropped last month as shoppers felt the pinch of…Read More