Rate peg decision was unanimous

ALL NINE members of the Bank of England's Monetary Policy Committee voted to keep interest rates on hold earlier this month. Minutes of the MPC meeting on 6 and 7 March show the committee - which includes Bank Governor Sir Edward George - argued the prospects for the world economy had improved over the past month.

In particular it found recovery was coming 'earlier and more rapidly' than previously expected, and was more broadly based among countries and sectors.

The MPC also found the balance of evidence suggested stronger prospects for the UK. However, there were concerns over two consecutive months of falls in retail sales and the levels of household debt. The committee was therefore 'clear' interest rates should not be changed this month.

But further action was not ruled out: 'It would be important to monitor closely how the outlook for inflation evolved month-to-month, and the committee stood ready to adjust rates in either direction as necessary,' the minutes said.

At the MPC's February meeting two members - Christopher Allsopp and Sushil Wadhwani - voted in favour of a 0.25% trim. Rates have been kept on hold at 4% for four consecutive months, after the slowing global economy and 11 September prompted a total reduction of 2% in 2001.