BoE committee members continue to push for rate rise

Ian McCafferty and Martin Weale argued that economic circumstances were sufficient to justify an immediate rise in Bank Rate, stating that keeping the Bank Rate at its current level for too long risked unbalancing the recovery.

Their argument for the rate increase surrounds unemployment reaching its estimated medium-term equilibrium level by the middle of 2015, and a tightening in the labour market suggesting that wage growth might pick up sharply as slack was absorbed.

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Mark Carney stated last month that markets still expect Bank Rate to increase, but to a more limited extent and at a more gradual pace than they did earlier in the year.

NIESR recently predicted that the Bank of England would hold interest rates until after the general election next year, forecasting a rise from the current level of 0.5% to 1% by the end of 2015 before rising gradually to to 2.75% by the end of 2019.

The latest policy meeting minutes stated that "headwinds weighing on the economy, together with the legacy of the financial crisis, meant that Bank Rate was expected to remain below average historical levels for some time to come."

A recent dip in CPI inflation alongside a reduction in oil prices were the main factors in the decision to postpone a rate rise.