BoE committee debated surprise higher rate rise

A key Bank of England committee considered hiking the cost of borrowing by as much as 0.5% earlier this month, it emerged today.

Members of the Bank’s Monetary Policy Committee (MPC) argued the rise would surprise markets, helping to slow inflation and cool soaring debt levels.

But although this higher than expected rise in interest rates was discussed, the committee’s nine members voted unanimously for a 0.25% increase to 4.25%.

The hike earlier this month was the third time the Bank has lifted its base rate in six months.

Minutes of the rate-setting meeting revealed today that the MPC’s argument for a cautious approach was now less persuasive.

All members agreed the arguments for a 0.25% rate were “decisive”.