Two Bank of England Officials in favor of Rate Rise
Two Bank of England policymakers again voted to raise interest rates this month, leaving the central bank divided for a second successive month, but the rest of their colleagues remained firmly against tighter policy.
External members Martin Weale and Ian McCafferty voted to raise interest rates to 0.75 percent from their record-low 0.5 percent.
The MPC said that it was concerned that temporary weakness in the euro zone could turn into a prolonged period, and revive worries about the solvency of some euro zone governments.
“This could damage confidence and disrupt financial markets, and, as a result, the downside risks to UK growth in the medium term had probably increased,” the MPC said.
They also commented on a “remarkable” lack of volatility in markets – particularly for crude oil – against a backdrop of increased tension in Ukraine and the Middle East.
Average weekly earnings have been very weak, and the MPC said this could be partly due to the long-term unemployed re-entering the labour market in low-skilled work.
BoE Governor Mark Carney said last week that central bank forecasts in August had shown that interest rates did not need to rise until the spring of 2015 to ensure that inflation remained on target for the foreseeable future.
Source: NYT- Two Bank of England Officials in favor of Rate Rise
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