BoE split three ways on UK rates again in Aug

Bank of England policymakers were split three ways in August for a second month running, with one voting to hike interest rates, another to cut but the remaining seven deciding to keep borrowing costs steady at 5 percent.
Minutes from the Aug. 6-7 meeting showed on Wednesday the Monetary Policy Committee mulled the case for all three options but the majority were happy to leave rates on hold because although inflation was rising, the outlook for growth had worsened.
Timothy Besley repeated his call for a quarter-point rise in rates and David Blanchflower again voted for a 25 basis point cut.
The minutes reinforced expectations that the next move in interest rates will be down, but also disappointed some investors who had been betting that more policymakers would have joined Blanchflower in voting for lower rates.
As a result, sterling rose immediately after the minutes were published but then reversed.
"The BoE are increasingly concerned about the outlook for growth, while the near-term worries about inflation are offsetting this for now," said James Knightley, an economist at ING.
"Nonetheless, with commodity prices having fallen substantially and the labour market downturn intensifying, we believe that these inflation fears should subside in coming months."
The MPC noted that upside risks to inflation had eased over the month because of the slide in crude oil prices.
"The fall in oil prices, if sustained, would reduce some of the pressure on utility prices in the near term," the minutes said. "Pay growth had remained subdued. Some measures of inflation expectations had fallen back in July."