Bank split on interest rate move

Bank of England rate-setters were split three ways again this month when they left policy unchanged despite mounting pressure on inflation.

Minutes of the December rates meeting suggest increasing concerns among members of the Monetary Policy Committee (MPC) over inflation after it rose again in November to 3.3%.

They said upside risks to inflation had increased, but added that the majority of MPC members continued to believe economic conditions would bring inflation back to target in the medium term.

Andrew Sentance remained the lone voice calling for a quarter-point rise in rates to calm inflation, while MPC colleague Adam Posen reiterated his vote for another £50 billion in quantitative easing (QE) to support the recovery.

With the majority backing a “no change” decision, rates were held at 0.5% for the 20th month in a row while QE was maintained at £200 billion.