Three MPC members voted against rate cut

The minutes from this month’s Monetary Policy Committee reveal three members voted against the 0.25% rate cut.

Tim Besley, David Blanchflower and Andrew Sentence all voted against the cut, saying that no change was necessary because economic slowdown was found to have progressed at a slower rate than expected.

The members suggested that a premature cut might make it appear to the public that the committee was more focussed on offsetting negative news about the housing market than hitting its inflation target.

The minutes show that the majority of members believed the cut was necessary in order to deliver market expectations based on the Inflation Report released by the Bank of England in February.

Most members also felt a cut would reduce the ‘tail’ risk of a sharp downturn in consumer demand in general later in the year which could result in more aggressive and immediate MPC policy action being necessary.

They also felt the near-term inflationary boost would be a short-lived issue if it took place at all.