BoE votes 7-2 to hold rates, wage increases not sufficient to justify hike

FXStreet (London) – Bank of England minutes showed that the monetary policy committee voted 7-2 in favour of holding rates at 0.5 percent, with Martin Weale and Ian McCafferty again the dissenting members.

Despite a strengthening of wage growth, the MPC said that this “promising” increase wasn’t sufficient to warrant hiking rates, with BoE governor Mark Carney saying that “as yet, pay growth was only roughly in line with, rather than in excess of productivity growth.

As expected the MPC minutes cited declines in oil prices and declining global yields as the most important events of the month, mirroring a statement made by Mark Carney earlier this week that the drop in oil prices would be a net positive for the UK economy by lowering business costs and increasing disposable income for consumers.