The Bank of England is about to move one step closer to an interestrate increase as policy makers' warnings on the risks to inflation harden into votes.
While the key interest rate is forecast to stay at 0.5 percent, a majority of economists say that at least two of the nine-member Monetary Policy Committee will vote for tightening next week. Both the decision and the votes will be published simultaneously on Aug. 6 in London as part of a new communications format under Governor Mark Carney.
The MPC are meeting against a backdrop of accelerating wage growth and the longest streak of continued economic expansion since before the recession that started in 2008. External headwinds over which the country has little control, including weakness in Europe and China, along with the strength of sterling, may stay the majority's hand for now.
"We have some members of the MPC who have over the last few months been rather hawkish," said George Buckley, an economist at Deutsche Bank AG in London, who predicts one or two MPC members will vote for an increase. "It's very difficult to see a lot of members voting for a hike, especially with China on the cards as well."
MPC members Martin Weale and Ian McCafferty are seen by economists as the most likely to vote for a rate increase. They were pushing for tightening last year, before dropping their call in January as inflation tumbled.