Three members of MPC vote for interest rate increase

Interest rates will continue at their record low of 0.25 per cent following the latest vote of the Monetary Policy Committee, but for the first time since May 2011 there were 3 dissenting votes in favour of an increase.

Ian McCafferty, Michael Saunders and Kristin Forbes all voted to increase interest rates from 0.25 per cent to 0.5 per cent, giving a very strong indication that a rise could be implemented in the upcoming months. The last time there were 3 dissenting votes in favour of an interest rate increase was 6 years ago. It shows the level of concern among the policymakers at the slowing economy and rising inflation.

While the result of the vote will be good news for mortgage borrowers and house purchasers, there will be concern that the 5-3 split vote is an indication that a rate rise is around the corner.

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