With three hawks voting for an increase at their meeting two weeks ago and another five putting on record the need for another rise in the next month or two, it won't take much to produce a majority in favour of tightening. Only two of the current majority need to switch sides to produce this outcome.
The crucial question is which factors are the ones to watch. The minutes make it clear that the labour market is the area of the economy that worries the MPC most. The majority went as far as to say that the most recent data on employment and skills shortages could force it to revise up the assumptions on earnings growth made just a month earlier in its inflation report. Indeed, according to some commentators, October's rise in average earnings to 4.9 per cent from 4.7 per cent was enough to justify a quarter- point hike on its own.
But the MPC was right to come down on the side of caution, because, as its minutes show, the picture remains very confused. The Bank's agents found widespread evidence of skills shortages, yet this has not fed through to the observed earnings data in the form of a sharp spike.
On top of that, the 2000 wage round is just round the corner and January is one of the most important months for pay deals. While pay settlements remained low in 1999 - as consumer confidence hit rock bottom after the series of global financial crises - employees know that the outlook is much rosier for next year. Employers may find it hard to justify mean pay awards. Yet on the other hand inflation is close to 36-year lows making it harder for unions to demand exorbitant settlements. This is clearly an issue that needs more time and research.
The MPC is very aware of the significance of the direction, size and timing of the next move in rates. Both the hawkish minority and the cautious majority are aware of the scope for making a big monetary policy mistakes. But with data sending mixed signals, Christmas upon us and the millennium bug still to be crushed once and for all, no change was the safe banker.
All the signs are that next months MPC meeting will be a more difficult affair and its decision more delicately balanced.
If the doves prevail and the MPC backs away from a quarter-point hike in January, then the Bank runs the risk of having to dampen demand with a much more psychologically punishing half point increase the month after that.Reuse content