2-7 split on base rate movement

Following the last Monetary Policy Committee meeting in March the release of the minutes show that there was a 2-7 split over interest rate movement, with two members of the committee voting to cut rates by 0.25% and the other seven voting to keep rates on hold at 5.25%.

As a result of the majority vote interest rates remained on hold after the meeting.

One of the two that voted to cut interest rates according to the minutes was the deputy governor of the Bank of England, Sir John Geive, who was opposed by the governor of the central bank, Mervyn King, who wanted to keep the base rate on hold. Bank officials have stated that increasing pressure over rising inflation means that they have to be careful about cutting rates despite concerns over the economy.

The US Federal Reserve, on the other hand, is continuing to slash interest rates in order to try and minimise the risk of recession, with the rate coming down by 3% in the past six weeks, taking it from 5.25% to just 2.25%.

Many economists and analysts are now predicting that there will be a further interest rate cut in the UK following the April Monetary Policy Committee meeting.