The Bank of England came within a whisker of lowering interest rates by a quarter point in July, strengthening expectations that a cut will materialise in August The minutes to the July meeting, published this morning, showed that the number of dissenting votes doubled to four in July from just two the previous month. The votes for a reduction came from Kate Barker, Charles Bean, Stephen Nickell and the Monetary Policy Committee's newest member, David Walton in his inaugural vote. The majority, led by BoE governor Mervyn King opted to keep the benchmark repo rate unchanged at 4.75 pct for the 11th month running on July 7, the same day when the public transport system was attacked by terrorists. Markets will find ample reason to back up rate cut expectations in the latest set of minutes. For one, the close 5-to-4 vote was not expected. The dovish four who had voted for a cut said the downward revisions to quarterly GDP made in late June warranted lower borrowing costs. They felt that since economic growth had been below trend over three quarters, this implied "a softer outlook going forward." They cited the risk that household spending may fall even further given the heavy debt burden carried by UK consumers. Additionally, they said that business investment was "more likely to disappoint" while the labour market "appeared to be softening slightly." One rate setter even went so far as to say that "monetary policy was no longer accomodative," the minutes revealed Overall, the doves said a cut in July would reduce the risk of greater changes in the benchmark rate at some point in the future. The majority on the other hand felt that a rate cut right after GDP growth for the first quarter was revised down may send out wrong signals to the market. It could, they felt, "be misinterpreted as an attempt to target output" and not inflation. They felt there was "no great risk" in waiting for more evidence and analysis before changing the benchmark rate. The minutes also revealed that the MPC learnt about the bombs that rocked London towards the end of its policy meeting. None among the nine-member panel felt that the bombings should alter the rate verdict that day