Three MPC members vote for rate rise in February

Three members of the Monetary Policy Committee voted for a Bank base rate rise in February, minutes from the meeting reveal.

Spencer Dale joined Martin Weale in voting for a rise of 0.25% while rate rebel Andrew Sentence opted for a 0.5% rise.

All other six, including Bank of England governor Mervyn King, voted to hold the rate at 0.5% for the 23rd consecutive month.

Adam Posen was the only member to vote for an increase in quantitative easing from £200m to £250m.

But the minutes also shows that most members agreed that the case for tightening monetary policy had been strengethed due to the risks of inflation.

Sentence says there is mounting evidence that firms were able to pass on cost increases to the prices they set and noted also that nominal domestic demand had been growing for some time.

He told the MPC that it was significantly more likely than not that inflation would overshoot the inflation target in the medium term.