BoE's MPC voted unanimously to keep policy unchanged, minutes show

The Bank decided to maintain interest rates at 0.5% and asset purchases at £375bn amid underlying inflationary pressures.

The minutes said members Martin Weale and Ian McCafferty believed there may be a case for an increase in the Bank Rate later in the year given the outlook for inflation beyond the short term. Inflation is expected to return to the 2% target in two years.

One member said the next move in policy was as likely to be a loosening as a tightening.

The BoE signalled that interest rates are expected to be raised by June 2016 as indicated in the Inflation Report last week.

“As expected, the Bank of England voted unanimously to keep interest rates unchanged, although there does appear to be differences over when it will be necessary to raise them," said Dennis de Jong, managing director at forex broker UFX.com.

“While record low inflation reads like great news for consumers, it’s a real threat to businesses and the wider health of the economy. But unlike in the Eurozone, where there are falling prices and flagging economic performance, any UK deflation should be short-lived and therefore an interest rate rise looks an increasingly likely measure, perhaps as early as later this year."

Capital Economics said that ultimately economic data would influence changes in the Bank Rate, such as the labour market figures published on Wednesday showing falling unemployment and wage growth.