SMPC votes narrowly to hold interest rates 5th February 2007

The IEA's Shadow Monetary Policy Committee has voted by five votes to four to hold interest rates

Not for publication before: 5th February 2007

Shadow Monetary Policy Committee says: “hold interest rates for now” in knife-edge vote

At its latest meeting, the IEA’s Shadow Monetary Policy Committee (SMPC), a group of leading monetary economists that monitors developments in UK monetary policy, voted to hold interest rates by five votes to four. Three members wanted to raise rates by 0.25% and one member wanted to raise rates by 0.5%.

A number of SMPC members were concerned about the recent rise in CPI inflation to 3%, expressing the view that the Bank of England had risked its credibility by allowing inflation to rise so rapidly and by not being sufficiently active, at an early enough stage. There was therefore a general welcome for the recent rise in interest rates as it was essential that markets cont