MONETARY Policy Committee member Martin Weale voted against the "forward guidance" on UK base rates unveiled by new Bank of England Governor Mark Carney last week, it has emerged.
Mr Weale was revealed as a sole dissenter in minutes of the MPC's July 31 and August 1 meeting, which were published yesterday and showed an eight-to-one vote for the form of forward guidance which has been implemented.
The Bank of England committee last week said it did not intend to raise base rates from 0.5% at least until the International Labour Organisation measure of unemployment had fallen to a "threshold" of 7%.
This guidance would cease to hold if, in the MPC's view, it were more likely than not that annual CPI inflation 18 to 24 months ahead would be 0.5 percentage points or more above the 2% target.
It would also no longer apply if medium-term inflation expectations no longer remained sufficiently well-anchored.
The minutes show, while Mr Weale was not against forward guidance in principle, he believed that the 18 to 24-month timescale for the first inflation "knockout" clause in the forward guidance was too long.
They state: "One member of the committee, Martin Weale, while supportive of the adoption of forward guidance, voted against the proposition in order to register his preference for a time horizon for the first inflation knockout that was shorter than proposed."
Providing insight into Mr Weale's rationale, the minutes say: "One member, while accepting the principles of forward guidance, saw a particularly compelling need to do more to manage the risk that forward guidance could lead to an increase in medium-term inflation expectations, by setting an even shorter time horizon; that would make clear that the forward guidance was fully compatible with the committee's commitment to meeting the 2% inflation target in the medium term."
The minutes emphasise that Mr Weale nevertheless intended to form his future judgments about the application of guidance and the knockout criteria in line with the framework adopted by the committee."
The minutes show the MPC was unanimous in voting to hold UK base rates at a record low of 0.5%, where they have been since March 2009. All nine members also voted to maintain the scale of the quantitative easing programme at £375 billion.
QE is aimed at stimulating activity by boosting money supply through the purchase of Government and corporate bonds, funded through the issuance of central bank reserves.
Until June, MPC members Paul Fisher and David Miles had been voting for an immediate £25bn increase in QE to £400bn.
Referring to MPC members' views on QE two weeks ago, the minutes state: "Most members continued to believe that further monetary stimulus in the form of asset purchases was not appropriate at the current juncture...
"For other members, the case for further monetary stimulus remained as compelling as in July. But for them, there was merit in first supporting the implementation of forward guidance and waiting to gauge its impact, in particular on financial market prices, before reconsidering an increase in the committee's programme of asset purchases."
The minutes note the MPC's view that recent domestic economic data had been "unexpectedly strong".
However, MPC members continued to predict a slow recovery.
The minutes state: "The legacy of adjustments left by the financial crisis meant that the recovery was likely to remain weak by historical standards."
They also highlight MPC members' view that it was "unlikely that consumption growth could continue at its current rate for long without some rise in real incomes".
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