Bank of England voted 7 to 1 in favour of unchanged base rate
The minutes from the June MPC meeting have indicated a small shift in the former unanimous vote to maintain UK base rates at 0.5%. It was revealed that Andrew Sentance voted in favour of increasing rates to 0.75% as a means of offsetting the potential risk of inflation which he believes will not fall into the Bank of England's target range in the short-term. However, there was a unanimous vote to continue with a suspension of the quantitative easing program which would suggest that deep seated concerns about the UK economy are not yet fully blown.
While a small shift in the MPC voting pattern will obviously catch the eye of analysts and investors perhaps it is good to see that at least some members of the MPC is taking the threat of inflation seriously. There is no doubt that, if left unattended, inflation could potentially ruin any economic recovery in the UK and cast it back into the dark ages of two years ago. This would undo all of the previous government's significant investment into the UK economy and put the UK in a very dangerous and precarious position.
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