Monetary Policy Committee vote split 4:5
Minutes from the Bank of England's Monetary Policy Committee meeting released today have hinted at a possible interest rate cut in August.

Analyst Capital Economics believes the vote is little short of confirmation that a rate cut will happen next month, with another likely to follow.

Four of the nine members of the committee voted to cut rates on July 7, acknowledging that a reduction would provide support to household spending.

Capital Economics UK economist Paul Dales said: 'The objections of the other five members to an immediate cut in rates appeared to reflect the timing, rather than any conviction that rates would not need to fall at all.'

Interest rates have remained at 4.75 per cent since the beginning of the year. Dales predicts they will fall to 3.5 per cent by the middle of next year.

If the forecast is true, it will bring welcome relief to a struggling retail sector. The British Retail Consortium (BRC) has been campaigning for a drop in interest rates for some time, saying it is the key factor in driving consumer confidence.

A BRC spokeswoman said: 'The BRC has been calling for a gradual reduction in interest rates for some months now, to halt the continuing decline in retail sales and restore some consumer confidence. But we are disappointed that our calls keep falling on deaf ears, especially in the face of so much evidence from across the economy that a reduction is now urgently needed.'

The call has been supported by key industry figures. This morning, as GUS released a poor trading statement, finance director David Tyler said: 'The retail market will go on being tough for the rest of this year and into the next. An interest rate cut would help.'