The minutes of the U.K. central bank’s latest policy meeting show that policymakers are increasingly divided over how to tackle persistently high inflation without hampering economic growth, according to The Daily Telegraph. On Wednesday, the Bank of England published the minutes of the February meeting of the Monetary Policy Committee, which showed that Spencer Dale joined Martin Weale and Andrew Sentance in voting for an increase in the benchmark interest rate from its current record low level. The move surprised economists who had been expecting another 7-2 vote against raising rates.
Dale pushed for a 0.25% increase in the benchmark rate as inflation was recorded at 4% in the latest report, a level double the target 2% rate set by the central bank. The minutes said, “Most members agreed that the balance of risks to inflation in the medium term relative to the target had moved upwards,” strengthening the case for looser monetary policy. Economists expect the bank to weigh growth in the beginning of 2011. Adam Posen was again alone in calling for an increase in the bank’s £200 billion asset purchase program.