Wednesday, May 21, 2008
8-1 vote further dampens rate cut hopes
Posted by David Smith at 09:45 AM

The Bank of England's monetary policy committee (MPC) voted 8-1 to hold Bank rate at 5% earlier this month, with David Blanchflower as the only cutter. The rise in inflation to 3% (known to the committee but not the rest of the world) and heightened inflation expectations appeared to have tilted the balance in favour of holding rates. Givin last week's inflation report that seems certain to be the MPC's position for some time. The minutes are here.

Also today, the Council of Mortgage Lenders predicts that house prices will end 2008 with a 7% fall, while property transactions will drop by 35% to under 800,000. This is in line with the 5% to 10% price fall inadvertently leaked by a government minister. The CML's press release is here.