Minutes from the August Bank of England meeting may reveal a panel divided on an interest rate cut, but don't tell that to the currency market.

The pound fell about 1 cent to $1.8552 versus the dollar Wednesday -- approaching a 2-year low -- as sentiment grew regarding the need for the central bank to cut rates to avoid a recession.

In its August 7 meeting minutes (pdf), during which it kept its benchmark interest rate at 5%, some members argued for a rate cut after private banks in the United Kingdom cut GDP forecasts, while others said a rate increase was needed to check inflation expectations.

U.K. slowdown mirrors U.S. slump

London-based economist Mark Chandler told BloggingStocks Wednesday the inflation pressures stemming from oil's rise are real, but so is Britain's economic slowdown.

"Based on data I've reviewed, we're patterning America, only about a quarter late. GDP in Q2 slowed to 0.2% this year from 0.8% in Q2 last year, which is about the same deceleration rate as Q2 in America," Chandler said. "Almost certainly GDP will be negative for Q3, and I think the currency markets sense this and see a Bank of England rate cut or two up ahead."