Dissent among the members of the Bank of England’s Monetary Policy Committee (MPC) saw sterling rally from its multi-month lows against both the US dollar and euro although the rally was somewhat short lived against the dollar. With the minutes from the latest meeting of the MPC widely tipped to show no change in the voting pattern of its members, the decision by Martin Weale and Ian McCafferty to vote in favour of an in interest rate increase took the markets by surprise. The two members claimed it would be desirable to increase rates before wage pressures, due to the lag seen in the effects of monetary policy changes. This view lies in contrast to the rest of the committee, which see insufficient inflationary pressure to increase interest rates.
Today we see the release of retail sales data for the month of July, which is expected to show a steady increase from the previous month.