No dissent at the first monetary meeting

The minutes of the first meeting of the Bank of England's Monetary Policy Committee, published yesterday, were a disappointment for those who hoped for drama in its discussion, writes Diane Coyle.

The minutes of the June meeting record that the six voting members who were present - out of an eventual total of nine - were unanimous in agreeing that a modest rise in interest rates was needed. This was a contrast to the disagreements that had become the norm between the Governor of the Bank of England and Chancellor Kenneth Clarke in the old-style meetings.

The discussion started out by noting the dilemma for interest rate policy posed by strong growth on the one hand and the strong pound on the other. During the month before the monetary meeting on 5-6 June domestic demand growth had picked up and the pound had climbed further.

Weighing up the prospects for higher demand against the likely impact of the pound on exports, the committee concluded that the economy was likely to continue growing at a pace above its sustainable trend.

"There was a need for tighter monetary policy in order to hit the inflation target two years or so ahead."

There was a discussion of tactics: would a delay in raising rates help limit the impact on the currency? The committee thought not, and decided to act immediately.