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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/01/growing-pressure-to-raise-rates.jpg"><img class="alignnone size-full" title="The number of Bank of England policymakers who voted in favour of an interest rate hike has increased" src="http://londonglossy.com/wp-content/uploads/2011/01/min-growing-pressure-to-raise-rates.jpg" alt="The number of Bank of England policymakers who voted in favour of an interest rate hike has increased"/></a></p>
<p>Pressure at the Bank of England to curb soaring inflation mounted earlier this month, minutes of a meeting revealed, as the number of policymakers who voted in favour of an interest rate hike increased.</p>
<p>The January rates meeting showed that two members of the Bank&#8217;s nine-strong monetary policy committee (MPC) &#8211; Andrew Sentance and Martin Weale &#8211; voted in favour of an increase in rates from their historic low of 0.5% to 0.75%. In previous months, Mr Sentance has stood alone in calling for a quarter-point rise.</p>
<p>The minutes suggest the committee, which was split three ways as member Adam Posen also reiterated his vote for a second bout of quantitative easing, was becoming increasingly concerned about rising inflation after it climbed to 3.7% in December.</p>
<p>The details of the meeting were published a day after Bank governor Mervyn King warned inflation could rise towards 5% in coming months, but that the Bank was powerless to control the factors contributing to the inevitable squeeze on living standards.</p>
<p>Surging food costs and petrol prices led to the increase in the CPI rate of inflation in December, and the figures prompted warnings from economists that a rate hike was likely to come sooner than expected.</p>
<p>However, shock GDP figures released on Tuesday diluted this argument as the economy unexpectedly went into reverse in the last three months of 2010.</p>
<p>The publication of January&#8217;s minutes reveal the difficulties faced by members as they admitted that inflation had &#8220;exceeded the committee&#8217;s expectations in recent months&#8221;.</p>
<p>Considering the case for a rate hike, the minutes said curbing demand may help the committee hit its 2% target in the medium term.</p>
<p>The minutes added: &#8220;Moreover, an increase in bank rate at the current juncture might lessen the risk that a larger increase became necessary at a later stage if inflation persisted above the target.&#8221;</p>
<p>But considering arguments against an increase in rates, members said there were existing economic factors likely to dampen demand, such as the uncertain impact of the government&#8217;s fiscal tightening, the effect the eurozone debt crisis will have on UK exports and the reduced availability of credit.</p>
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