–Adds Detail To Version Transmitted At 0930 GMT
–6 BOE MPC Voted for Unchanged Bank Rate; 3 for Hike
–BOE MPC Dale, Weale voted for 25bps Rate Hike
–BOE MPC Sentance Voted for 50bps Rate Hike
–8 BOE MPC Voted for Unchanged QE; Posen Voted for stg50bn Increase
–Some MPC: Bank Rate Rise Case Had Strengthened Recently

LONDON (MNI) – The Bank of England’s Monetary Policy Committee
again split four ways at its March meeting, with one member voting to
extend quantitative easing, six voting for unchanged policy, two for a
25 basis point rate hike and one for a 50 bps increase.

The minutes of the March meeting showed that while the vote on the
MPC was unchanged from February, the committee was wrestling with the
new shoc of a sharp rise in oil price and developments in the Middle
East and North Africa. The minutes said some MPC members believed the
case for a rise in Bank Rate had increased in recent months, leaving the
door open to the widely expected May rate hike.

Noting the turbulence in the Middle East and North Africa and the
rise in the oil price the MPC said “Unless the increase in the oil price
quickly reversed it would very likely lead inflation in the near term to
rise further above the target than previously expected, adding to the
risk that expectations of medium-term inflation would rise.”

The oil shock, however, also poses a threat to supply capacity and
“might be expected to dent global growth prospects and, potentially,
business, household and investor confidence.”

The minutes showed the big picture had changed little in the month
since the MPC last met, but uncertainty had risen.

“Overall, while the main considerations for the Committee’s policy
decision had remained the same, recent developments had appeared to
increase the degree of uncertainty over the medium term outlook for both
activity and inflation,” the minutes said.

“Nevertheless, the balance between the upside and downside risks to
the medium term inflation outlook had probably not shifted significantly
over the month.”

As in February, the no change camp split into two factions – those
believing the case for a rise in Bank Rate has strengthened in recent
months and others who were not convinced it had.

Of the MPC members who voted to keep Bank Rate on hold some thought
the risks from higher inflation expectations were limited while others
thought the upside risks had risen and “that the case for an increase in
Bank Rate had strengthened in recent months.”

Members of the unchanged camp were concerned the slowdown in growth
in the second half of 2010 would not turn out to be only temporary.

The majority unchanged camp did agree on the case for waiting to
see how things develop.

“Overall, the uncertainty created by both developments in the oil
market and the recent indicators of household spending and confidence
meant that there remained merit in waiting to see how those factors
evolved before altering the stance of monetary policy,” the minutes
said.

The minutes of the March meeting showed the same vote breakdown as
in February.

Andrew Sentance backed a 50 basis point hike and Martin Weale and
Spencer Dale voted for a 25 basis point increase. Adam Posen was alone
in voting for an extension of quantitative easing.

–London newsroom: tel+44 207 862 7491; email: drobinson@marketnews.com

[TOPICS: M$$BE$,MT$$$$]