BoE-Sentance repeats lone hike call, some lean closer to easing

Published 09/22/2010, 04:36 AM
Updated 09/22/2010, 04:44 AM

LONDON, Sept 22 (Reuters) - Bank of England policymaker Andrew Sentance repeated his lone call for an interest rate hike in September but some of his colleagues thought that the probability that more monetary easing would be needed had increased.

Minutes of the Sept 8-9 meeting published on Wednesday showed an 8-1 vote in favour of leaving interest rates on hold at a record low of 0.5 percent, as expected.

But the minutes showed that some members were getting more worried about the growth outlook for the economy despite worries that persistently high inflation would become embedded in consumer psychology and thought that the chances of more stimulus being needed had gone up.

"The probability that further action would become necessary to stimulate the economy and keep inflation on track to hit the the target in the medium-term had increased," the minutes said.

Most analsyts expect the BoE to hold rates steady well into next year but the minutes are likely to bolster expectations that further easing is still possible, especially after the U.S. Federal Reserve on Tuesday indicated it too could engage in further stimulus.

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