Mervyn King voted for rate rise, minutes reveal

Bank of England’s governor Mervyn King voted for a 25 basis point rise in June, the minutes from the latest Monetary Policy Committee meeting reveal.

Although the majority of the MPC voted to hold the base rate at 5.5%, King along with deputy governor John Gieve, Tim Besley and Andrew Sentance voted for a rate rise to 5.75%.

They were outvoted by the remaining five members of the MPC, deputy governor Rachel Lomax, Kate Barker, Charles Bean, David Blanchflower and Paul Tucker.

The minutes show that during the June meeting members were split on whether to freeze or increase rates.

Some members argued that there were evidence that household spending and house price inflation was slowing and is likely to slow further without the need for an immediate rate rise.

Moreover, the rise in market interest rates over the month had already provided a degree of tightening in monetary conditions giving the MPC scope to hold the base rate.

Other members argued for a rise – they warned there had been little news on the month to affect the judgement in May’s inflation report and that balance of risks to the outlook for inflation was on the upside.

The members disposed to a rate rise felt there was no compelling reason to wait to raise rates.