ClickAJob News

The Bank of England voted 8-1 in favour of maintaining interest rates at 5.25 per cent earlier this month, meeting minutes have revealed.

Monetary policy committee (MPC) member David Blanchflower was the sole dissenter, unexpectedly advocating a reduction in base rates by a quarter of a per cent.

Today's minutes revealed that despite latest consumer price index (CPI) inflation figures standing at 2.8 per cent, MPC members were concerned at the "substantial volatility" present in global financial markets at the end of February.

They cited the fact that share prices had fallen by up to five per cent on some markets overnight during the tail end of last month as evidence for keeping rates at their current level.

"For most members, the financial market volatility added to the case for holding rates this month," the minutes reveal.

"Although some market participants were expecting an increase in Bank rate this month, the majority were not.

"An unexpected move by the committee could provide an unwelcome addition to the uncertainty and volatility in financial markets," they go on to say.

Despite 0.25 per cent rises in base rates in August and November last year, as well as January 2007, CPI inflation remains above the government's target of two per cent.

But nevertheless the MPC expects inflation to fall below this target level during the coming months.

The Bank's next interest rate decision will be disclosed on April 5th.