2014.09.0503:53:07UTC+00Bank of England maintains current rates

A majority of policymakers from the Bank of England (BoE) remained unconvinced of the need to hike up borrowing costs which led to a vote to keep current interest rates at a record low. Changes in the central bank’s assets earned through its previous quantitative easing program which amounts to £375 billion were likewise decided against.

Minutes of the BoE meeting is expected to be released two weeks from now with analysts eager to look for clues regarding the issue of how split the committee was in making its decisions. Two out of nine members voted last month for an early rate rise of 25 percentage points arguing that the growth in wages will follow the improvements being achieved by the labor market and that it would ensure more gradual rate hikes .

London economists, however, forecast that an increase to Britain’s interest rates will happen no sooner than next year. ING’s James Knightley believes that the two dissenting BoE officials will continue to be in the minority for some time. He added that, “The more mixed macro picture coupled with concerns about eurozone growth – the UK’s largest trade partner – suggest that in the absence of upside activity data shocks, the majority will continue to opt for the status quo in the next few months.”

The sentiment was echoed by senior UK economist Samuel Tombs from consultancy firm Capital Economics who claimed that there was no “obvious trigger” during the past month that would have convinced other policy makers to have a change of heart. If anything, the said that apparent weaknesses in wages and inflation revealed recently could have strengthened the decision to maintain the current 0.5% interest rate.