Interest rate cut decision `unanimous`

David Blanchflower was the only member of the monetary policy committee (MPC) meeting who voted against the 0.25 per cent rate cut in the February vote.

In the MPC minutes published yesterday, it is noted that while eight MPC members voted in favour of the 0.25 per cent cut proposed by governor Mervyn King, Professor Blanchflower wanted the base rate to be reduced by 0.5 per cent.

He argued that greater emphasis was needed on the risk of a "very sharp slowdown in UK growth" and that recent data in the labour market were similar to that of the US several months previously.

The majority of MPC members backed the central projection for the economy which pointed towards some spare capacity, "even if interest rates followed the path implied by market yields".

It was suggested that in the medium term, this would help ensure that inflation returned to the two per cent target set by the government, the minutes stated.

Commenting to the Times on the MPC minutes, Capital Economics` Vicky Redwood said: "[Professor] Blanchflower clearly puts more weight on the downside risks to growth than other members, with recent speeches showing that other members see the risks as more finely balanced."