Bank of England Deputy Governor, Sir Jon Cunliffe, has said it was not the right time to raise interest rates but suggested he may vote in favour of a hike later in the year.
Cunliffe told the BBC lifting borrowing costs now would only make matters worse given that households are already being squeezed by rising inflation and weak wage growth.
“[Consumer spending] is slowing as households’ real incomes are squeezed by higher inflation, we expect some of that slowing to be offset by growth in business investment, growth in exports. And I want to see how that plays out,” he said.
“(We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves.”
Cunliffe wants to see if improvements in business investment and exports could offset the slowdown in consumer spending.
His comments echoed that of Governor Mark Carney’s last week but came in contrast to that of the Bank’s chief economist, Andy Haldane, who signalled that he was ready to vote for a rate increase “relatively soon”.
It adds to evidence of a split between the BoE’s Monetary Policy Committee members on whether to hike rates.
Three out of eight MPC members voted in favour of raising interest rates at the last policy meeting on 15 June, the closest the Bank has come to making the move since 2007. The ninth seat on the MPC has yet to be filled.
The pound intially weakened against the dollar but has recovered since, rising 0.02% to US$1.2816, but versus the euro is down 0.21% to €1.1278.