Policy makers are set to delay first rate hike

 
Chris Papadopoullos
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A COOLING housing market, low inflation, and a troubled Eurozone made for more dovish tones at this months meeting of the monetary policy committee.

The meeting was held on the 7 and 8 October but the minutes were made available yesterday.

As in the previous three meetings the vote to hold rates was won by seven to two. Ian McCafferty and Martin Weale voted against – they believe inflation is temporarily below its two per cent target due to the strength of the pound which can make imports cheaper.

Inflation was 1.2 per cent in September which came as a surprise to many, and pushed back expectations of the first rate hike to mid-2015. It was previously expected at the start of 2015.

The overall outlook for inflation was that it would remain lower than previously anticipated.

“Uncertain global economic data and low UK inflation means that the MPC are under no pressure to hike interest rates any time soon. We can expect the MPC doves to rule the roost well into next year with a rise unlikely until after the General Election,” said Peter Hemington, partner at finance firm BDO.