LONDON, June 21 (Xinhua) -- The British central bank, the Bank of England (BoE), held the bank rate on Thursday at 0.5 percent, but the bank's chief economist voted for a rate rise.
The rate-setting Monetary Policy Committee (MPC) voted by a majority of 6-3 to maintain the bank rate at 0.5 percent.
BoE chief economist Andy Haldane voted for a rate rise. Haldane's support for a rise saw him join two external members of the committee, and raised expectations among economists and markets that a rate rise soon is now more likely.
All members were more confident that the slowdown in GDP growth in the first quarter was temporary, with activity rebounding in the second quarter in line with the BoE's projections.
Retail sales in April and May were shown as examples of a rebound in activity in the second quarter after poor first quarter figures, and the committee in its minutes expected growth to strengthen quarter on quarter to 0.4 percent, up from 0.1 percent in Q1.
The more hawkish members highlighted a pick-up in unit wage costs, and an increase of about 0.5 percentage points in wage settlements compared to last year.
The committee said in its minutes that "an ongoing tightening" of monetary policy was required, signalling an expectation for a rate rise soon.
Howard Archer, chief economic adviser to EY ITEM Club, a financial forecast service, told Xinhua that the BoE's chief economist joining the rate-rise camp was "a surprising development".
He added: "The minutes of the June meeting also come across as slightly more hawkish. The MPC has judged that the economy's weakness in the first quarter will prove to be temporary with momentum recovering in the second quarter and appearing to be 'broadly on track'."
Before the decision to keep rates at the present level was announced, markets had signalled a 30 percent expectation of a rate rise for the next meeting in August. This rose to a 70 percent expectation based on the minutes and the stronger support from within the MPC for a rise.