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BoE's policy makers unanimous on holding rates in July

Xinhua, July 22, 2015 Adjust font size:

The nine-member Monetary Policy Committee (MPC) of the Bank of England (BoE) voted unanimously to keep benchmark interest rates on hold this month, according the central bank's meeting minutes released on Wednesday.

The British central bank announced on July 8 that Bank Rate would stay at 0.5 percent and the stock of asset purchases, or quantitative easing policy, maintain at 375 billion pounds (585 billion U.S. dollars).

The minutes showed that the MPC is cautious on the development of Greece during the month.

Although the direct exposures to Greece of British economy and financial system were small, the situation remained fluid and the Committee would continue to monitor developments closely, noted the minutes.

In regard to medium-term inflation expectation, the minutes said a number of members, the balance of risks to medium-term inflation relative to the two percent target was becoming more skewed to the upside at the current level of Bank Rate, said the minutes.

"For these members, the uncertainty caused by recent developments in Greece was a very material factor in their decisions: absent that uncertainty, the decision between holding Bank Rate at its current level versus a small increase was becoming more finely balanced," the minutes added.

Britain's Consumer Prices Index (CPI) grew by zero in the year to June 2015, down from the 0.1 percent increase in the year to May 2015, official data showed.

But earlier this month, the BoE's governor Mark Carney signaled to raise the interest rate earlier than previous expectation, or at the turn of this year, as the solid economic recovery has adsorbed the spare capacity of the labor market and pushed up the real income growth of households.

Martin Beck, senior economic advisor to the EY ITEM Club, commented in a note: "A subtle change of wording in July's MPC meeting minutes suggested that the Committee has become more hawkish, echoing the sentiments expressed in a number of speeches over recent weeks." Endit