Cut in interest rates expected

A further reduction in interest rates seems likely soon after it emerged that two members of the Bank of England’s Monetary Policy Committee voted for cheaper borrowing this month.

Minutes of the last meeting of the MPC revealed that the deputy governor of the Bank, Sir John Gieve, and external member David Blanchflower both argued the case for a quarter per cent cut in rates.

Analysts believe that the 7-2 split indicates a reduction to 5 per cent is on the cards for April.

Other members of the Committee were still concerned that inflationary pressures in the economy meant that borrowing costs should not be trimmed in back-to-back months.

But with the latest figures from the Office for National Statistics showing unemployment at a historic low and wage inflation holding at acceptable levels, the MPC may be tempted to allow interest rates to ease down next month.