MPC minutes show 'wait and see attitude'

22-Feb-2007

The publication of the minutes of the last meeting of the Bank of England's monetary policy committee (MPC) shows a cautious attitude towards future interest rate rises, which may be of interest to first time buyers.

First time buyers who are concerned about future interest rate rises may be reassured by news that the MPC voted by seven to two to keep interest rates on hold at 5.25 per cent last month, reports the Financial Times.

Although the Bank of England cautioned that interest rates may need to rise further because of an expectation that inflation would otherwise exceed its target over a period of two years, further falls in the value of sterling against the dollar are expected today amid expectation that inflation targets will be met.

"These minutes give little indication there is much momentum within the MPC as regards additional tightening near-term," said Richard McGuire, a representative from RBC Capital Markets.

"With the majority of the committee appearing to be in data-watching mode, the balance of risks have tilted against the delivery of a further round of tightening next month," he added.

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