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Businesses see interest rates in the balance
23/02/2007
The Bank of England reveals that its panel was divided on the decision to maintain the base rate at 5.25 per cent this month.
Minutes from the monetary policy committee (MPC) show that two of its members voted for interest rates to be increased for a fourth time in seven months at the February finance meeting.
Although the two men were outvoted this month, most finance analysts are warning UK businesses that a further rise is likely in the short-term as inflation continues to run above the Treasury's two per cent target.
The MPC minutes state: "It was difficult to judge whether, and if so by how much, policy might need to be further tightened to keep inflation on track to meet the target,".
"It would take some time for the full effects of the past tightening to be seen."
British companies have already seen three quarter-point rate rises from August last year and the minutes suggest the majority of the MPC is waiting to see the impact of these increases upon business investments and consumer savings.
Minutes from the monetary policy committee (MPC) show that two of its members voted for interest rates to be increased for a fourth time in seven months at the February finance meeting.
Although the two men were outvoted this month, most finance analysts are warning UK businesses that a further rise is likely in the short-term as inflation continues to run above the Treasury's two per cent target.
The MPC minutes state: "It was difficult to judge whether, and if so by how much, policy might need to be further tightened to keep inflation on track to meet the target,".
"It would take some time for the full effects of the past tightening to be seen."
British companies have already seen three quarter-point rate rises from August last year and the minutes suggest the majority of the MPC is waiting to see the impact of these increases upon business investments and consumer savings.