Two BoE Members Wanted Interest Rate Rise
Newly-revealed minutes from the Bank of England's Monetary Policy Committee show its members were split on a potential interest rate rise.
It said two of its nine members voted for a rate rise earlier this month, in the first split vote on rates since July 2011.
The split decision is the first under governor Mark Carney's tenure.
MPC external members Martin Weale and Ian McCafferty voted to raise the base rate from the five-year historic low of 0.5% to 0.75%.
For the two members, in particular, economic circumstances were sufficient to justify an immediate rise in the base rate, which directly impacts home loan and saving interest rates.
They noted that the continuing rapid fall in unemployment, alongside survey evidence of tightening in the labour market created a prospect that wage growth would pick up.
The vote was made earlier this month, before the latest inflation figures were released, which showed a drop in the Consumer Prices Index to 1.6% - well below the 2% BoE benchmark.
Official pay growth figures, released on Tuesday, also showed that the average weekly earnings figure contracted by 0.2% in June.
The MPC unanimously voted to to maintain its quantitative easing liquidity programme at £375bn.
Meanwhile, the Council of Mortgage Lenders (CML) revealed the latest loan figures to coincide with the MPC vote.
It estimated that gross mortgage lending reached £19.1bn in July, 7% higher than June's figure of £17.9bn.
The July estimate is 15% higher than July last year, which was at £16.7bn.
It is the highest monthly figure since August 2008, when the value reached £19.3bn.
CML market and data analyst Caroline Offord said: "Mortgage activity seems to have remained robust following the regulatory changes but the eventual impact of these remains uncertain.
"Property transactions in the first half of the year showed a 25% increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect that intensifying affordability pressures could start to dampen this upwards trend.
"Economic conditions have strengthened, but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged."