…MPC voted 8 to 1

The published minutes of the MPC meeting revealed that David Blanchflower voted differently to all other members, favouring a larger cut in rates to 5%.

When discussing the possibility of a housing market slowdown, they said mortgage approvals had reached the lowest number since 1995.

However, the minutes state: “There was little evidence to suggest that a slowing housing market would lead to widespread financial distress and defaults in the United Kingdom unless there was also a significant rise in unemployment or mortgage rates.”

Members also said that uncertainty about the future path of interest rates had risen internationally.

The MPC discussed the potential for greater tightening in credit, due to continued stress in global financial markets.  They also highlighted lower UK consumption growth and slowing retail sales.