MPC unanimous on base rate hold
The minutes noted that Greek debt talks were a factor in the “clear-cut” decision to hold the base rate to protect the UK against potential inflation.
They read: “[For some members] the uncertainty caused by recent developments in Greece was a very material factor in their decisions”
Samuel Tombs, senior UK economist at Capital Economics, suggested that some MPC members may vote to raise the base rate next month.
He said: “The recent easing of the crisis may be enough to shift some members to vote to raise rates next month. “
The consensus from the minutes was the state of the housing market was “considerably weaker” than expected a year ago but it had recently “improved modestly” with increased mortgage approvals in April and May.
Last week Governor of the Bank of England said a rate rise is moving closer, indicating that it could happen at the turn of the year.
Tombs stuck with his previous prediction of a Q2 2016 rate rise however, as he said CPI inflation looks likely to hover at around zero until the end of 2015.
He added: “With inflation pressures still extremely weak and a major fiscal squeeze set to hit the economy, we continue to think that a majority to raise rates will not be mustered until the second quarter of 2016.”