Bank of England dissenters drop call for higher rates after inflation slump

Published by Reuters on Wednesday, 21 January 2015 by David Milliken and Li-mei Hoang
(Reuters) – Two Bank of England policymakers have ditched their long-standing calls for an end to record-low interest rates in the face of tumbling inflation, prompting economists to again push back forecasts of when the BoE will start to tighten policy.

A slump in oil prices caused British inflation to drop far more than expected to a 14-year low of 0.5 percent in December, far below the BoE’s 2 percent target and a level that brings outright falls in prices into prospect.

Minutes of the Jan. 7-8 Monetary Policy Committee meeting published on Wednesday showed unanimity for the first time since July, after Martin Weale and Ian McCafferty said raising rates now might cause below-target inflation to become entrenched.

British government bond prices …

Tags: Bank of England, inflationMonetary Policy Committee, interest rates, oil prices

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