8-1 vote revealed in Bank minutes

The Bank of England's monetary policy committee (MPC) voted overwhelmingly earlier this month in favour of maintaining the base rate of interest at five per cent.

According to the latest minutes for the MPC's May rate-setting meeting, members voted eight to one to keep rates on hold following figures showing a sharp increase in inflation.

Just one member, David Blanchflower, voted for the base rate to be cut by a quarter-point to 4.75 per cent, arguing that the bank should "look through the short-term spike in inflation".

The meeting, held on May 7th and 8th 2008, saw the committee discuss developments in financial markets, including the effects of the credit crunch, rising consumer inflation and international economic stability.

Members noted that financial market conditions had witnessed a "modest improvement" since April's meeting, with equity prices rising and the Special Liquidity Scheme (SLS) helping to boost Britain's banking system.

Under the SLS, the UK's leading lenders are permitted to swap their high quality mortgage-backed and other securities for UK Treasury Bills on a temporary basis.

The Bank of England is looking for a new deputy governor following the decision by Rachel Lomax to leave her post and step down from the MPC when her current term of office expires on June 30th.


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