Bank of England awaits inflation report

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Januarys decision by the monetary policy committee (MPC) not to change the base rate of interest was spurred in part by the Bank of Englands desire to see the quarterly inflation report, due in February, it has been revealed.

Decisions to change the interest rate coincided with the publication of inflation reports twice in 2006 and again in May 2007.

And the minutes of the latest MPC meeting show that the Bank remains in "wait and see" mode in the new year, as observed by economists towards the end of 2007.

Eight of the nine members of the rate-setting panel opted for the current rate of 5.5 per cent to be maintained when the proposal was put forward by governor Mervyn King.

Only David Blanchflower expressed a desire to cut rates for the second month in a row, a feat last performed by the Bank following the events of September 11th 2001.

Mr Blanchflower voted for a rate cut in each of the three months preceding the most recent meeting but was unsuccessful in both the October and November 2007 gatherings.

But the minutes of the January meeting reveal a desire among the remaining MPC members to ensure inflation remains on target, rather than to ease the monetary pressure on consumers.

"Reductions in Bank Rate in two successive months might, given the current conjuncture, encourage observers to think that the committee was focused more on stabilising demand," the document states.

"The committee would be able to use the February forecast round to assess the medium-term outlook for inflation," the minutes add.

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