Bank split in three on rates vote

The Bank of England is now divided over interest rate policy

The Bank of England was split three ways over its May decision to keep interest rates on hold at 4.5%, its minutes reveal.

Its Monetary Policy Committee members voted six in favour of no change earlier this month, while one member wanted a rise and another a fall.

David Walton called for a quarter-point increase, while Stephen Nickell voted for a cut by the same amount.

Interest rates have now been on hold for nine months in succession.

'Balanced views'

Howard Archer, chief European economist at Global Insight, said the three-way split meant it was now likely "interest rates will remain unchanged through 2006".

"The overall tone of the minutes are still relatively balanced, and there is clearly considerable uncertainty within the MPC over the growth and inflation outlook," he said.

The Bank of England's interest rate decisions have to balance the need to aid economic growth at the same time as limiting any inflationary pressures.

While a lower rate is better for business, a higher level helps to control inflation.

The latest official inflation data showed a 0.2% rise in April to 2%, the Bank of England's target figure.