LONDON -- Bank of England policymakers remain divided on whether to raise interest rates, voting 7-2 at their last meeting in favour of keeping the main rate at a record low 0.5 per cent.
Minutes from the Sept. 3-4 meeting show Wednesday that policymakers retained the status quo even as Europe's third-largest economy recovers at a brisk pace. With inflation at 1.5 per cent, below the 2 per cent target, pressure to raise rates remains muted.
Two policymakers argued that a tighter labour market might cause wage growth to accelerate. Ian McCafferty and Martin Weale suggested that since monetary policy operates with a lag, the bank should anticipate market pressure by raising rates in advance.
Meanwhile, a separate report showed unemployment dropped to 6.2 per cent in July, the lowest since 2008, from May's 6.4 per cent.
