The Bank of England's Monetary Policy Committee (MPC) voted 8 to 1 to keep the UK interest rate on hold at 5 per cent earlier this month in an attempt to control rising inflation.

The minutes from the MPC's meeting on May 8 and 9 revealed that only David Blanchflower voted in favour of a quarter point reduction, that would have cut borrowing costs to 4.75 per cent, arguing it was "particularly important to look through the short-term spike in inflation".

Consumer Price Index (CPI) inflation, the Government's preferred measure, rose sharply in May from 2.5 per cent to 3 per cent - above the 2 per cent target.

Mr Blanchflower argued: "The factors pushing inflation up – oil and other commodity prices – were beyond the MPC’s control and, with pay growth remaining subdued, this period of above-target inflation would have little tendency to persist.

"The current and prospective weakness of demand meant that there was a clear risk of missing the target on the downside looking further ahead. An immediate reduction in Bank Rate was necessary to reduce that risk."

However, the majority of the MPC members said that an interest rate cut "would make it more difficult to keep inflation expectations in line with the target."

The minutes said: "Although economic activity was likely to slow, the Committee had judged that some slowing in the growth rate of output was likely to be necessary for inflation to settle close to the target around two years ahead. A further reduction in Bank Rate this month could create the impression that the Committee was trying to stabilise output growth rather than maintaining its focus on the inflation target."

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