Britain is on the cusp of seeing its first rise in interest rates in over six years because more Bank of England members are voting for a hike.
Although, rates are likely to remain unchanged this month.
Britain’s interest rates have stayed at a record low of 0.5% since March 2009.
When the BoE releases its interest rates decision at 12.00 p.m BST, the minutes from its meeting will reveal that at least two of the central bank’s nine rate setters will vote for a hike in rates, according to Reuters.
However, the news agency pointed out that this month’s rate decision is likely to show rates staying at 0.5% because a poll it conducted with 48 economists said rates would not change.
Furthermore, BoE member Andrew Sentance told the BBC this morning that “two or three members of the committee” voted for rise in rates. He added that he thinks rates will rise this year.
Britain’s central bank is under pressure to move rates higher due to low unemployment and strong GDP growth. Both the Office for National Statistics (ONS)< and the Bureau of Economic Analysis (BEA), the respective UK and US statistical agencies, made GDP revisions in the last week. In July, the ONS said the unemployment rate for March to May was 5.6%.
Last month, Bank of England governor Mark Carney revealed that the BoE is looking to raise interest rates “at the turn of this year.”
“Short term interest rates have averaged around 4.5% since around the Bank’s inception three centuries ago,” said Carney in a speech on July 16.
“It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historic averages. In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year.”