LONDON, March 5 (Reuters) - The Bank of England marked the sixth anniversary of its cutting interest rates to a record low by keeping them on hold once again on Thursday, but an improving economy suggests rates are likely to rise at some point over the next 12 months.
While no economist polled by Reuters expects the Monetary Policy Committee will vote to raise rates before a May 7 national election, given record low inflation, there are signs that policymakers believe a rate hike could come sooner rather than later.
The BoE said on Thursday it was keeping rates at 0.5 percent, their level since the depths of the financial crisis.
Minutes of the meeting, explaining the debate among rate-setters, are due to be published in just under two weeks’ time.
Business surveys this week showed Britain’s economy started 2015 strongly, and wage data in the next few months could provide some policymakers with enough evidence that it can start to be weaned off low borrowing costs.
Two policymakers, Martin Weale and Kristin Forbes, warned recently that rates could rise in the near future if inflation picks up strongly from current low levels.
Another MPC member Ian McCafferty, who voted with Weale to hike rates from August through December, has said he will keep a close eye on wage data over the next few months before deciding whether to resume voting for higher interest rates.
But now though, most MPC members seem content to wait and see how far inflation plunges before considering a rate hike.
Last month’s quarterly economic forecasts from the BoE showed consumer price inflation is likely to turn negative for the first time on record in the next few months.
Governor Mark Carney has said he expects the BoE to raise interest rates as its next move although he said more stimulus could be required if inflation stayed around zero for more than a year.
The timing of a first interest rate hike from the U.S. Federal Reserve will also weigh on BoE policymakers.
Seven of the 17 members of the Fed’s policy committee have now said they at least want the option of a June tightening on the table.
The situation in Britain stands in contrast to the euro zone, where the European Central Bank is due to flesh out its bond-buying stimulus plan later on Thursday. (Reporting by Andy Bruce; editing by William Schomberg)