British central bank keeps interest rates on hold

Nine policy makers from the Bank of England (BoE), the British central bank, voted unanimously to keep benchmark interest rates on hold, as the risk of deflation is mounting, according to the meeting minutes of BoE published on Wednesday.

The nine-member Monetary Policy Committee (MPC) of BoE endorsed the decision by a unanimous vote. Over the past five months, there was a 2-7 opinion split on the interest rate decision. Two policy makers, Ian McCaffety and Martin Weale, preferred to raise interest rates immediately.

The BoE announced on Jan. 8 that interest rates would stay at 0.5 percent and the stock of asset purchases, or quantitative easing policy, maintain at 375 billion pounds ( 566.75 billion U.S. dollars).

In the meeting minutes, the MPC said there was a risk of "inflation persisting below the target (2 percent) for longer than previously expected."

And "the fall in near-term inflation might become more persistent if it lowered inflation expectation, pay and other cost growth in a way that became self-perpetuating," said the MPC.

In addition, the MPC believes that the continued decline in oil prices was likely to contribute to a reduction in capital investment in Britain's oil industry, though it could also stimulate the economic growth in the country.

British unemployment rate fell to 5.8 percent in the three months to November 2014, registering a 1.3 percent decrease compared with the same period in 2013 and the lowest level since mid-2008, data released by the Office for National Statistics show.

Meanwhile, in the same period, British employees' total pay was 1.7 percent higher than a year earlier. Pay excluding bonuses for employees was 1.8 percent higher, recording its biggest increase since the third quarter of 2012, figures showed.

Regarding the stock of purchased assets, the MPC also voted unanimously in favor of maintaining the current scale, according to the minutes. Endti