The probability of an August interest rate hike is higher, according to the BoE, as its chief economist supported his two colleagues from monetary policy committee, giving his voice in favor of a fastest increase in the cost of borrowing.
Andy Haldane, who became a member of the committee four years back, backed the minority out of nine rate-setting members, namely Ian McCafferty and Michael Saunders, urging to lift interest rates. This result will stir up speculation of possible readying for a rate lift in August.
The sterling that had stood at 1.31 versus the dollar ahead of the news, advanced to $1.3220. This new vote on rates follows May’s postponing of a raise by the BoE, considering the worst data of the state of British economy in five years, caused by bad weather.
The Beast from the east’s cold and snowfalls lead to work interruptions at construction sites, it also shooed away people from visiting stores, making growth contract to 0.1% in the January-March quarter this year.
The Bank held the view that May’s deceleration was an anomaly and the economy would rebound, the same opinion was upheld today.