Three way split may spell MPC confusion

The minutes of the April meeting of the Bank of England's monetary policy committee (MPC) have revealed a three-way split in the voting over the decision to cut the base rate to five per cent this month.

Before the minutes were published this morning CEP news had reported that analysts expected a unanimous decision to be revealed.

Instead, they showed that six had voted for the reduction of 0.25 per cent, one had favoured a 0.5 per cent cut and two had supported a hold.

Such a split contrasts with recent votes, which have not seen more than two members voting against the prevailing decision since the lat rate rise in July 2007, while there had not been a three-way split since May 2006.

This may indicate a growing uncertainty about the future direction of monetary policy, which in turn could be bad news for those hoping to see mortgage interest rate cuts.

People looking to get on the housing ladder may decide to bypass the uncertainty by opting for self build.


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