Bank of England remains split on rates

LONDON (AP) — Bank of England policymakers remain divided on whether to raise interest rates, voting 7-2 at their last meeting in favor of keeping the main rate at a record low 0.5 percent.

Minutes from the Sept. 3-4 meeting show Wednesday that policymakers retained the status quo even as Europe’s third-largest economy recovers at a brisk pace. With inflation at 1.5 percent, below the 2 percent target, pressure to raise rates remains muted.

Two policymakers argued that a tighter labor market might cause wage growth to accelerate. Ian McCafferty and Martin Weale suggested that since monetary policy operates with a lag, the bank should anticipate market pressure by raising rates in advance.

Meanwhile, a separate report showed unemployment dropped to 6.2 percent in July, the lowest since 2008, from May’s 6.4 percent.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Federal News Network Logo
Log in to your WTOP account for notifications and alerts customized for you.

Sign up