Minutes from the MPC’s meeting, which was postponed following the general election, show that the committee was concerned with two issues – the outlook for activity and inflation, and how that outlook would be impacted by the Euro bailout and the uncertainty over the new UK government.
Some members believed that increases in costs suggested that inflation was not being successfully curbed, while other members forecast that inflation would be suppressed by the lack of credit and worries over the strength of the eurozone.
The minutes say: “Although the committee judged that the risks to activity and inflation in the near term had increased, it was too early to assess with confidence the overall impact of recent developments on the medium-term outlook.
“Some of the present uncertainties should be reduced by the time of future meetings.
“All Committee members agreed that the overall outlook for inflation implied by the Inflation Report projections warranted leaving policy unchanged.”
Figures from the Office for National Statistics yesterday revealed the the Consumer Prices Index annual rate of inflation had hit 3.7%, its highest level for 17 months.