BoE's policy makers vote to keep interest rate on hold

The Bank of England (BoE) Wednesday released its Monetary Policy Committee's (MPC) meeting minutes of this month showing all nine members voted to keep interest rates unchanged at 0.5 percent.

The MPC's opinion split in previous months. Two members who previously voted to raise benchmark interest rate changed their ideas.

The British central bank announced in early this month that Bank Rate would stay at 0.5 percent and the stock of asset purchases, or quantitative easing policy, maintain at 375 billion pounds (or 590 billion U.S. dollars).

In the meeting minutes, the MPC noted the strength of the headwinds to growth had begun to ease.

"As they eased further over time, the interest rate required to keep the economy operating at normal levels of capacity and inflation at the target was likely to continue to rise," said MPC.

Some analysts said that means some countries would likely start to normalize monetary policy, especially the United States may hike interest rates later this year.

However, the MPC agreed that the path for Britain monetary policy would depend on the prospects for inflation in the country and would not be determined by the actions of other central banks.

Britain's Consumer Prices Index rose by 0.1 percent in the year to May 2015, compared with a 0.1 percent fall in the year to April 2015, signalling the country's deflation was only temporary.

"The conventional wisdom is that when the US Fed changes interest rates, the UK MPC usually follows suit soon after. However, the historical record contains several exceptions to this pattern," said Samuel Tombs, Senior UK Economist of Capital Economics.

"We continue to think that the MPC will be able to keep rates on hold until Q2 2016 and to raise them to just 1 percent by the end of next year," said Tombs. Endit