SMPC votes to hold rates - 5th March 2007

SMPC votes to hold rates but believes that rates will have to rise further in the coming months.

The SMPC's rate recommendations are made with respect to the Bank of England’s decision concerning the official Bank rate paid on commercial bank reserves to be announced on Thursday 8 March.

On this occasion, two SMPC members voted to raise Bank rate by 0.25% on 8 March, one wanted the shock therapy of a 0.5% increase, and six members voted to hold. However, two of the members voting to hold had only changed their minds from being in favour of a 0.25% increase at the last moment because of the international stock-market shakeout on 27 February, which occurred at a very late stage in the production of the poll. Several SMPC members maintained a bias to rise, so the debate remains mainly about the timing of the next rate increase: a clear majority of members believe that there should be another rise at some stage in the next few months.

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