All members of the Bank of England's Monetary Policy Committee (MPC) were unanimous in keeping the Bank rate and leaving the stock of asset purchases unchanged, minutes of the meeting held on March 5th and 6th have showed.
The MPC's analysis of recent economic growth suggested at the component level that the recovery over the past year "might not have been as reliant on the household sector as it had previously appeared", with "initial signs that the anticipated broadening from household to business spending might have already begun".
Even so, the committee stated that there remained some way to go to ensure that the recovery was both balanced and sustainable, with headline inflation falling below the target for the first time in over four years and wage growth higher although still relatively weak.
With unemployment remaining above its 'knock-out' threshold of 7%, the committee believed its existing policy guidance from August 2013 remained in place and no member thought it appropriate to tighten, or to loosen, the stance of monetary policy yet.
Unemployment was thought "quite likely" to fall to 7% during the following few months, breaching one of the three knock-out conditions that would necessitate the committee to consider raising the bank rate.
Of the other knock-out conditions, the minutes reveal that there was a range of views among committee members over the outlook for inflation in the medium term, although all members agreed that the chance of inflation being above 2.5% in 18-24 months time was less than 50% and that the appreciation of sterling had made that prospect even less likely.
The MPC indicated it expected CPI inflation to remain close to the target rate over the next few years, as domestic inflationary pressures rise as the degree of spare capacity lessened and wage growth returned to more normal levels, but would be offset by a waning of external prices pressures.
The impact of the stance of monetary policy on financial stability had been limited and the MPC noted that expectations for the future path of Bank Rate had been relatively stable since it first announced its guidance in August.
Commenting on the minutes Dr. Howard Archer, Chief European+UK economist at IHS Global Insight comments that: "Our current view is that the Bank of England will likely start edging interest rates up around mid-2015, and they will reach 1.0% by end-2015 and 2.0% by end-2016. However, the fact that three of the nine MPC members will be changing by the August meeting adds some uncertainty to the interest rate outlook."