The monetary policy committee's division highlights the dilemma faced by the Bank of England: balancing inflation control against the need to stimulate economic growth amid rising wages.
The three members advocating a rate cut argue that the economy's lagging growth, recently downgraded to zero, necessitates lower borrowing costs to provide crucial support.
Governor Andrew Bailey and his colleagues worry that persistently high wage growth could lead to an inflationary spiral, threatening the Bank's 2% inflation target.
With rising wages expected to bolster demand, retailers may further increase prices, complicating the task of maintaining controlled inflation while addressing economic stagnation.
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