11 February 1998

Minutes of the Bank of England Monetary Policy Committee meeting held on 7 and 8 January show that the decision to keep short-term interest rates unchanged at 7.25% was not unanimous, being supported by only five of the eight members voting. Eddie George, Mervyn King, David Clementi, Ian Plenderleith (all of the Bank of England) and DeAnne Julius voted for no change. Sir Alan Budd, Professor Charles Goodhart and Professor Willem Buiter believed rates should be raised. In its quarterly Inflation Report the Bank of England predicts that underlying retail price inflation (RPIX) will be just above the target of 2.5% in two years time and that consequently "it is more likely than not that a modest further rise in interest rates will be necessary at some point to hit the inflation target looking two years or so ahead".