The February MPC minutes suggest that Bank rate will rise in two weeks' time if revised fourth-quarter GDP figures and purchasing managers' / consumer surveys for February indicate that economic recovery is continuing.

The minutes reveal that Bank of England chief economist Spencer Dale joined Andrew Sentance and Martin Weale in voting for an interest rate hike this month. This is no surprise given his role in preparing the Inflation Report forecast, which signals a need for immediate tightening (see below). Adam Posen maintained his dissent in favour of a £50 billion expansion of QE.

The "MPC-ometer" model forecast a 4-4-1 vote split in February, i.e. four members voting for a quarter-point hike. The actual split was 3-5-1 but Andrew Sentance voted for a half-point move this month, as suggested by his speech last week. The "average interest rate vote", therefore, was exactly in line with the model's prediction.

One feature of the model is that the current month's forecast depends partly on the previous month's vote. The MPC's hawkish shift in February, therefore, has pushed the model further in favour of a quarter-point hike in March although there is still a chance that this prediction will be reversed if February's EU consumer survey (tomorrow), the fourth-quarter GDP revision (Friday) and purchasing managers' surveys for February (next week) are weak.

This assessment is consistent with the minutes, which reveal that, of the middle group on the MPC, "some thought that the case for an increase had ... grown in strength" but "there was merit in waiting to see how indicators of how the economy performed at the start of the year to help assess whether or not the decline in GDP in the fourth quarter presaged sustained economic weakness".

The waverers could also use current geopolitical unrest as an excuse for delaying action.

The numerical Inflation Report forecasts released today, however, create a strong presumption in favour of an immediate increase. Confirming an initial reading last week, the mean forecast for inflation in two years' time based on unchanged policy is 2.48%, representing the largest overshoot of the target since February 1998, when official rates were rising sharply (by more than 150 basis points over 14 months).