UK economic weakness persuaded members of the Bank of England’s Monetary Policy Committee to hold interest rates at 5 per cent at their August meeting, despite signs of strong inflationary pressure.

Although members thought the balance of risks to inflation was on the upside, the main question before the group was whether the economy would become sufficiently slack for inflation to be subdued of its own accord, the minutes showed.

Five members of the committee voted to hold rates steady, while one, Tim Besley, voted to increase rates and another, David Blanchflower, voted for a decrease. The vote had split the same way at the previous MPC meeting in July.

The minutes showed that the group carefully considered both raising and cutting the rate, with strong arguments in favour of each.

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