Rebel Sentance votes for base rate rise again

Andrew Sentance, member of the Monetary Policy Committee, has voted for a 0.25% rise in interest rates in August.

It is the third month in a row that Sentance has voted to increase the base rate but all other members voted for no change.

That includes new member Martin Weale who brought MPC’s total membership back up to nine after two months at eight.

On the topic of quantitative easing, the MPC says it is ready to “respond in either direction” as the balance of risks evolve.

Vicky Redwood, senior UK economist at Capital Economics, says the MPC is in wait and see mode.

She adds: “On the face of it then, the minutes are perhaps a bit less dovish than the Inflation Report – which clearly suggested that inflation would undershoot its target without a further policy loosening. But since the meeting and the Report, we have had the news that core inflation slowed sharply in July.

“What’s more, we still think that the MPC is too optimistic about the growth outlook, the numbers behind the Inflation Report released today show it expects GDP growth of 2.8% in 2011. In our view, further quantitative easing is likely – and at the very least, rates are unlikely to rise any time soon.”