Three-way splits on the Bank of England's monetary policy committee are a rarity, writes economics editor Larry Elliott.
This month's was the first in almost seven years and reflects uncertainty at the Bank about the way in which the economy is heading. One member of the MPC, Steve Nickell, has been voting consistently for a cut for the past six months; his view was given support today by the latest batch of government figures showing that the claimant count measure of unemployment rose in April for the 13th time in the last 14 months and that upward pressure on earnings remained weak.
David Walton, on the other hand, is worried that a combination of stronger output growth in the coming months and the big increase in energy prices risks pushing inflation above its 2% target. He thought a quarter-point increase in rates was needed.
The other six members of the committee (one seat is vacant following the departure of Richard Lambert) want to suck it and see. They saw no need to give a boost to the economy, but equally saw no pressing need to tighten policy given the weakness of domestic inflationary pressures.
No comments:
Post a Comment