The Bank of England's Monetary Policy Committee (MPC) voted seven to two to keep interest rates steady at four per cent earlier this month, with one fewer voting for lower rates than in October, minutes of the meeting showed today.
News that a greater majority voted for unchanged rates inNovember will be seen as lessening the prospects of borrowingcosts being cut further in the current cycle. UK official ratesare at a 38-year low.
Arguments in favour of leaving rates steady ranged fromconsumption growth which was expected to remain buoyant in thenear term, strong household borrowing, and the strength of thehousing market.
"A reduction in interest rates now risked stimulating houseprices and household borrowing even further, increasing the riskof a sharper fall in consumption at some point in the future."
There were risks to the inflation forecast "but they were onboth the upside and the downside", the minutes stated and if anyof the downward risks began to emerge, "there would be time toreduce rates to keep inflation on target around the two-yearhorizon."