Economists do not expect any change to the three-way vote split seen at the last three meetings, when MPC members Andrew Sentance and Adam Posen respectively voted for higher interest rates and more quantitative easing.
But markets will be keen to see if the MPC discussion offers any hint that policymakers were edging towards raising rates in the first half of 2011 rather than the second half, given rising inflation expectations among the general public.
Bank Governor Mervyn King said in a speech late on Tuesday that inflation could rise towards 5 percent in the coming months, though he stressed this was not a reason to raise rates as the longer-term outlook suggested inflation would fall in 2012.
Up until the release of Tuesday’s shock economic output data, which showed an unexpected 0.5 percent fall in GDP, speculators had steadily brought forward their bets on a first Bank rate rise to May from November.
Inflation was at least a percentage point above the Bank’s 2 percent target throughout 2010, and hit a six-month high of 3.7 percent in December.
December’s minutes showed that some policymakers were growing more concerned about upward inflation risks, and last week Posen admitted that overseas price pressures — if not those generated within the UK — were giving him concern.
Tuesday’s GDP data severely knocked market bets of an imminent rise in interest rates from their record low 0.5 percent, but does not render the MPC discussion earlier in the month entirely moot.
The GDP figures were also a blow to the coalition which has embarked on an austerity drive, the effects of which will not be felt fully until later this year.
King, speaking after the release of the data, said that they were in line with his prediction that economic recovery would be choppy and that he found the inflation data more worrying.
However, he dismissed criticism that the Bank’s credibility was at risk through its inaction on rates, insisting that upward pressures on inflation were temporary — a view which Sentance and some in financial markets dispute.