British interest rates seem likely to remain at 4.5 percent for some time, minutes to the Bank of England's July policy meeting suggested on Wednesday, with all seven committee members voting for no change.
While the 7-0 vote was expected by analysts, minutes of the July 5-6 meeting showed that no arguments were advanced for either raising interest rates or cutting them, and that there were "significant risks in both directions".
Financial markets in recent days had begun speculating that an eventual increase in rates could come as soon as next month, particularly following a surprise rise in June inflation. But the minutes suggest that is not likely.
"The overall message is the committee is very much on the fence at this stage," said Alan Clarke, UK economist at BNP Paribas. Most analysts expect the next move to be up, but not until later this year or perhaps early in 2007.
The minutes showed the Monetary Policy Committee appeared happy with current policy, arguing that recent developments were broadly in line with the May Inflation Report. This too had suggested interest rates would need to creep higher but not in any great hurry.
The MPC noted that financial markets had been more stable over the past month following sharp falls in stocks in June. But it said that lower equity prices and strength in sterling, if sustained, would tend to reduce inflationary pressures.
UK interest rate futures briefly popped higher after the minutes were released while the pound slipped as dealers reckoned the probability of an imminent increase had receded.
The minutes showed that MPC members were worried about much the same upside risks to inflation as in June, while downside risks included the possibility of more falls in asset prices and a more protracted economic slowdown in the United States.
Policymakers also noted a striking relationship between energy and import costs on one side and domestically-generated inflation on the other.
This, they argued, reduced the probability that inflation would settle below the 2.0 percent target once the effect of higher energy effects faded. But the recent rise in inflation was broadly as expected in the May Inflation Report.
Inflation rose to 2.5 percent in June, thanks mainly to soaring gas and electricity bills, although this figure was not yet available when the MPC met.
The MPC said it was difficult to reach firm conclusions about the recent upward revisions to past growth data - including the upward revision to first quarter GDP - but this could be fully analysed in next month's Inflation Report.