BoE votes unanimously for 0.25% rate rise

All nine members of the Bank of England's Monetary Policy Committee voted to raise interest rates by a quarter-point this month…

All nine members of the Bank of England's Monetary Policy Committee voted to raise interest rates by a quarter-point this month, minutes of their February 4th and 5th meeting published today showed.

The committee was agreed that the prospects for the global and domestic economy had improved, and this was likely to generate future inflationary pressures.

The minutes showed that members thought that a rate rise, the second in three months, was needed to ensure inflation would hit its 2 per cent target at the end of the MPC's two-year horizon.

"It would be appropriate in the light of prospective demand growth to withdraw some of the stimulus that the monetary policy stance was currently giving the economy," the minutes said.

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But while all nine members of the MPC agreed on the need for a rate rise, there appeared to be some differences on the way the rise in sterling since November should be considered in the policy decision.

Some MPC members thought it best to consider the pound's rise as a one-off effect on inflation which could be disregarded when setting interest rates.

They argued it should only become a factor if it subsequently started affecting wages and price-setting behaviour.

The MPC also agreed that a rate rise in February was consistent with a "cautious approach" to setting policy given the uncertainty about household debt levels.