The Bank of England held its policy stance unchanged. The Bank's balance of voting was in favor of the status quo as it remained at 8 to 1. Analysts were expecting the central bank to retain the current bank rates.
The MPC believes the CPI inflation posted -0.1% in September is likely to remain around this level till December. They expects the inflation rate to remian below 1% if the lower oil prices prevail in the market.
The members MPC argue the external factors may disturb the economic growth of the country especially the poor performance of emerging economies. The Q3 GDP of U.S. was less than expectation, but it is likely to be temporary. Whereas, emerging market economies are in downward trend, hence, this this may affect the U.K. exports.
Mr McCafferty voted for a rate hike, argues that U.K. is facing internal inflationary pressure, thereby domestic costs may rise more rapidly than anticipated. Therefore, a rate hike is necessary to control the inflationary pressure.
"Overall, the MPC's decision and minutes support our view that a Bank Rate hike is off the table in the short term and will be pushed out into at least Q2 2016, acknowledging risks to the downside in light of the above", says Barclays.
