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UK interest rates kept on hold at 0.25% | UK interest rates kept on hold at 0.25% |
(35 minutes later) | |
UK interest rates have been kept unchanged at 0.25% by the Bank of England's rate setting committee. | |
However, one of the nine who sit on the Monetary Policy Committee (MPC), Kristin Forbes, expressed concern about inflation and voted to raise rates. | |
It was the first time since July last year that the vote to maintain rates had not been unanimous. | It was the first time since July last year that the vote to maintain rates had not been unanimous. |
On Wednesday, the US central bank voted to increase interest rates, its second recent move upwards. | |
The Bank of England expects the UK economy to grow fairly briskly this year, at a rate of 2%. However, it then predicts a slowdown amid uncertainty surrounding the conditions of the country's withdrawal from the European Union. | |
Against that uncertain background, many economists have predicted that the Bank will leave rates unchanged until at least 2019. | |
However, Ms Forbes, who is due to leave the MPC at the end of June, backed a rate rise on the grounds that inflation is "rising quickly and was likely to remain above target for at least three years". | |
Pound impact | |
Latest official figures showed the UK's inflation rate rose to 1.8% in January, which is below the Bank's 2% target but the highest rate for two and a half years. | |
The minutes from the MPC's latest meeting indicated some other committee members might also be close to voting for a rate rise. | |
The minutes said: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted." | |
The fall in the value of the pound since the vote to leave the EU has meant goods brought into the country are more expensive. | |
Earlier on Thursday, the supermarket chain Sainsbury became the latest retailer to warn of the pressure to raise prices. | |
Other MPC members noted consumers were turning more cautious amid slowing wage growth and rising prices. |