Three MPC members vote for rate rise

The Monetary Policy Committee (MPC) vote was split over a rate rise in February with one more member, or three out of nine, voting for a rise.

The keenly anticipated minutes revealed Spencer Dale joined hawk Martin Weale, to vote for a 0.25% rate rise, with Andrew Sentence voting for a 0.50% move upwards.

Bank of England governor Mervyn King voted alongside six other members to hold the interest rate at 0.5%.

The Governor invited the Committee to vote on the propositions that Bank rate should be maintained at 0.5% and the stock of asset purchases financed would stay at £200bn.

Just one member, Adam Posen voted to increase the size of the asset purchase programme by £50bn to £250bn.

Howard Archer, chief UK and European economist, IHS Global Insight said: "The hawks within the MPC are growing in numbers and gaining ground, with an interest rate hike looking ever more likely within the next few months."

Archer said Dale was always the most likely to be the first Bank of England internal member of the MPC to break ranks as he has shown more hawkish tendencies before.

Howard added: "Furthermore, Andrew Sentance has upped the ante by voting to raise interest rates by 50 basis points to 1% rather than the 25 basis point rise to 0.75% favoured by Dale and Weale. This puts Sentance even more into conflict with Bank of England Governor Mervyn King who gives the impression that he currently is still against any early interest rate hike."

According to the minutes, other members did not feel the case had been made for a rise yet.

This inflationary risk was limited said members, according to the minutes, because the recent rises in inflation could be explained by the increases in energy, other commodity and world export prices.

However, of the members who voted against a rate rise, some thought that the case for an increase had strengthened.

Nevertheless, the Committee concluded: "A rise at this juncture could damage household and consumer confidence, which remained fragile."