All nine members of the Bank of England's Monetary Policy Committee voted to raise interest rates by a quarter-point to 4.75 per cent this month, minutes of their August 5th meeting showed today.
The minutes showed that the MPC made its decision in line with the forecasts it published in its Inflation Report last week which predicted that inflation would probably hit its 2 per cent target in two years if interest rates rose as implied by bond market expectations.
The MPC did not appear to have discussed a half-point increase in the repo rate as had been recommended by several analysts.
Instead, the committee only weighed the arguments for a quarter-point rise in interest rates or leaving them unchanged. But it did not find the arguments for the latter persuasive.
The MPC also noted that while there may be arguments for bringing inflation back to target more rapidly, such fine-tuning was neither desirable nor feasible.
One MPC member was still particularly worried by the record rise in consumer debt and wanted to raise rates because of the difficulties this could pose in the future.