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The Bank of England's Monetary Policy Committee (MPC) released its December meeting minutes on Thursday. 8 members voted to keep the central bank's monetary policy unchanged. Ian McCafferty voted to hike interest rate by 0.25%.
The consumer price inflation in the U.K. was -0.1% in October, below the central bank's 2% target. The BoE noted that inflation is expected to positive in November, to rise further as effects of low energy and food prices will dissipate and to be below 1% until the second half of next year.
"The projected return of CPI inflation to the target depends on an increase in domestic cost growth sufficient to balance the drag on prices from very subdued global inflation and past increases in the value of sterling," the BoE said.
The central bank said that the global and domestic outlook remained little changed compared to the previous month.
"There has not been much news on international activity relative to the forecasts contained in the November Report, with global growth having been stable at a rate well below historical averages. Prospects for domestic activity are also little changed on the month, with robust growth in private domestic spending continuing to counter-balance subdued demand growth overseas," the minutes said.
All MPC members agreed to hike interest rate gradually once the BoE starts raising its interest rate and "to a lower level than in recent cycles".
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