MPC split on interest rates

Two members of the Bank of England’s MPC voted to raise interest rates in August, the first time in three years that policymakers have done so. The minutes of the most recent meeting show that Ian McCafferty and Martin Weale voted for a 0.25% rise to 0.75%. On the back of the news the pound jumped in expectation that rates may rise sooner than expected. Sterling rose by 0.2% against the US dollar to $1.66. The minutes showed that despite low wage growth both Mr Weale and Mr McCafferty felt that rapidly falling unemployment made it more likely that salaries would pick up in the coming months. The prospect of a rate rise prompted Persimmon and Barratt Developments to lose some of the ground they gained earlier this week, as they fell 27p to 1323p and 9p to 359.6p respectively. The Daily Mail carries a guide explaining the possible effects of a rate rise on readers’ mortgages.