UK borrowing costs look like they are on hold for some time to come as the minutes to the last meeting of the rate-setting body of the Bank of England suggested that policy-makers think some sort of rebalancing is taking place in the economy as a whole. Though there are modest differences of opinion on the Monetary Policy Committee, especially around the growth outlook, the newsflow hasn't been weak enough for the more dovish members to join Steve Nickell in the rate cut camp. "For now the differences between members are minor and, what differences there are, are not being tested as quarterly GDP growth is back around trend and inflation is at target," said John Butler, economist at HSBC. "That means that for now interest rates are on hold but increasingly sterling and import prices are holding the key to the timing and direction of the next move in interest rates," he added. A more detailed look at the minutes showed that the MPC voted 7-1 in favour of keeping the key repo rate unchanged at 4.50 pct for the eighth month running. Nickell, for the fifth meeting running, and in his penultimate meeting, was the only one voting for a cut in his belief that there is spare capacity in the economy, particularly in the labour market. In an otherwise "as you were" set of minutes, Geoff Dicks, economist at the Royal Bank of Scotland said he was interested to read that the MPC once again raised the possibility that the economy may be rebalancing away from domestic demand and consumption towards net exports. The MPC said this expectation of a rebalancing has been encouraged by recent movements in relative prices, including higher energy prices, which would depress real personal disposable income, and the weakening of the exchange rate, which would support export demand. "Such a rebalancing would have little impact on domestic inflationary pressure, despite slower consumption growth," the minutes said. However, RBS's Dicks remains highly sceptical about this possibility. "We have been here many times before, most recently in 2004 when investment looked set to take up the running from the consumer only to fade away in 2005," he said. "And, where it is relatively easy to see weakness on the consumer side, it requires a leap of faith to see net exports continuing to underpin stronger demand," he added. Simon Hayes, analyst at Barclays Capital, was also interested to read of this apparent rebalancing and also noted that a number of members have not completely abandoned fears that sky-high energy costs will feed through into wages. Those continued concerns may have been sparked by yesterday's rise in the BoE's measure of household inflation expectations, which were available at the time of the meeting. "So, although there has been no strong evidence of second-round effects, there appear to be enough straws in the wind to keep a rate cut off the agenda for most Committee members," said Hayes. There were only eight members at the April 6 meeting following Richard Lambert's departure to the Confederation of British Industry. Lambert is to be replaced by labour market economist Professor David Blanchflower on June 1.