Bank of England MPC Minutes, 8 & 9 June

``There was time to gather further evidence on the depth and extent of the slowdown in consumption to see if lower interest rates were warranted,'' according to the majority view on the Monetary Policy Committee. ``A reduction in rates at this juncture would be a significant surprise, and would run the risk of the inference being drawn that the committee believed the situation had deteriorated more than it, in fact, thought.''

Most committee members judged that lowering rates now might ``accelerate the recovery in consumption growth and lead to inflationary pressures.'' The bank last cut rates in July 2003. may soon wear off, allowing inflation to rise.

Dissenting members Bean and Bell took the view that the recent slowdown in nominal growth, easing labor market conditions, and slower producer-price inflation suggested ``that demand pressures were less than previously thought.''

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