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| Three Bank of England policymakers vote for rate rise | Three Bank of England policymakers vote for rate rise |
| (40 minutes later) | |
| Another Bank of England policymaker has voted for an interest rate rise - suggesting rates could be raised sooner rather than later. | Another Bank of England policymaker has voted for an interest rate rise - suggesting rates could be raised sooner rather than later. |
| Spencer Dale has joined Andrew Sentance and Martin Weale in backing a rise, minutes of February's Monetary Policy Committee (MPC) meeting show. | Spencer Dale has joined Andrew Sentance and Martin Weale in backing a rise, minutes of February's Monetary Policy Committee (MPC) meeting show. |
| The remaining six MPC members voted to keep rates on hold at 0.5%. | The remaining six MPC members voted to keep rates on hold at 0.5%. |
| Worries are growing about the recent pick-up in inflation, boosted by rising commodity prices and the VAT increase. | Worries are growing about the recent pick-up in inflation, boosted by rising commodity prices and the VAT increase. |
| The Consumer Prices Index rose at an annual rate of 4% in January, twice the Bank of England's official target. | The Consumer Prices Index rose at an annual rate of 4% in January, twice the Bank of England's official target. |
| The extra support for a rate rise highlights the increasing disagreement among the MPC. | The extra support for a rate rise highlights the increasing disagreement among the MPC. |
| Mr Dale and Mr Weale voted to raise rates to 0.75% while Mr Sentance called for rates to increase to 1%. | Mr Dale and Mr Weale voted to raise rates to 0.75% while Mr Sentance called for rates to increase to 1%. |
| href="http://www.bankofengland.co.uk/publications/minutes/mpc/pdf/2011/mpc1102.pdf" >The minutes show that another MPC member, Adam Posen repeated his earlier votes to re-start the policy of money creation known as quantitative easing. | |
| 'Delicate balance' | 'Delicate balance' |
| The Bank's deputy governor Paul Tucker made a rare public statement on monetary policy on Tuesday, saying the MPC faced a "real dilemma" over whether to raise interest rates in the next few months. | The Bank's deputy governor Paul Tucker made a rare public statement on monetary policy on Tuesday, saying the MPC faced a "real dilemma" over whether to raise interest rates in the next few months. |
| "Our job is to bring inflation back to the 2% That's going to take us a little while and it means that we face a real dilemma in what to do about interest rates over the next few months," Mr Tucker told BBC Radio Bristol. | "Our job is to bring inflation back to the 2% That's going to take us a little while and it means that we face a real dilemma in what to do about interest rates over the next few months," Mr Tucker told BBC Radio Bristol. |
| "The question we face isn't to make a violent increase in interest rates, it's whether or not to take away just a little bit of the stimulus that we've been applying to the economy over the last few years. This is a delicate balance." | "The question we face isn't to make a violent increase in interest rates, it's whether or not to take away just a little bit of the stimulus that we've been applying to the economy over the last few years. This is a delicate balance." |
| On Monday, Mr Weale said that while inflation had been boosted in recent months by temporary factors, he was concerned that this could feed into people's expectations about future inflation, making price rises self-perpetuating. | On Monday, Mr Weale said that while inflation had been boosted in recent months by temporary factors, he was concerned that this could feed into people's expectations about future inflation, making price rises self-perpetuating. |
| "If businesses and people bargaining for wages expect high rates of inflation then there's a risk that they may build those expectations into their current behaviour," he told BBC Radio 4's World at One programme. | "If businesses and people bargaining for wages expect high rates of inflation then there's a risk that they may build those expectations into their current behaviour," he told BBC Radio 4's World at One programme. |
| However, Mr Posen has downplayed the risks from inflation. This week he told Oxford economists: "We must make policy based on the best available forecast... and not be tyrannised by popular fears or spectres of (inflation) expectations." | However, Mr Posen has downplayed the risks from inflation. This week he told Oxford economists: "We must make policy based on the best available forecast... and not be tyrannised by popular fears or spectres of (inflation) expectations." |