MEMBERS of the Minutes of the Bank of
There had been some speculation that external MPC member
This will fuel the belief that one or more MPC members could start voting for a rise in rates soon.
The minutes show the MPC noted two weeks ago that analysis of options prices suggested financial market participants put only around a 15 per cent chance on a rise in rates by the end of 2014.
Giving an insight into MPC members' view of this, the minutes state: "The relatively low probability attached to a
Incoming MPC member
This statement appears to chime with some of the discussion among MPC members this month.
Minutes of the
However, MPC members also noted there were dangers of raising rates too soon.
Detailing their discussions, the minutes state: "If policy were tightened prematurely, however, that could be associated with considerable costs in terms of lost output. That was particularly important when the starting point was one from which interest rates could not easily be reduced."
In a speech yesterday to the
He said that, on the one hand, existing measures of under- employment might be overstating the underlying amount of spare capacity in the labour market.
He cited, on the other hand, the "continuing unusual weakness in wages", which he said might indicate there was more spare capacity in the economy than the MPC had assumed.
He declared, even after rates started to rise, monetary policy would still be providing considerable support for the economy.
MEMBERS of the
Minutes of the Bank of