A glimmer of hope for an interest rate cut has been sparked by the publication of the minutes of the Bank of England monetary policy committee’s August meeting, at which there was a split between members favouring a rate rise, hold or reduction. Although the MPC agreed to hold the base rate at 5%, its careful weighing up of the twin problems of a slowing economy and rising inflation made the decision-making process less than clear cut, the minutes show. The Bank’s latest economic growth forecast shows the economy contracting in the third quarter, and stagnating after that. <br><br>Two quarters of economic contraction would see the UK technically in recession – a concern that is moving some MPC members to favour a rate cut despite inflationary fears. David Blanchflower voted for a rate cut at the August meeting, while Tim Besley voted for an increase – the remaining seven committee members favouring a hold. The minutes show that the main concern was whether inflation could be reined in without the need to increase rates. Conditions in the financial markets appear not to have improved, as the Libor interbank lending rate hit its highest level in two months – 2.81% – …