The Bank of England’s Monetary Policy Committee voted to maintain the Bank Rate at 0.25% for the next month.

However, three of the committee’s eight members actually voted for a rate hike. They were outvoted this month but it has prompted speculation that an increase in rates could come sooner rather than later.

The Bank of England said that ‘all members agreed that any increases in Bank Rate would be expected to be at a gradual pace and to a limited extent’.

Inflation surprise

One reason for the close vote was the fact that inflation was 2.9% in 12 months to May, well above the 2% target and exceeding the Bank’s expectations.

Rebecca Piggott, research fellow at the National Institute of Economic and Social Research, said: “The MPC voted narrowly to hold monetary policy unchanged, a closer vote than market expectations. This level of disagreement raises the probability of an interest rate rise in the near future and that would exert further pressure on household budgets, which are already under pressure from subdued real wage growth.”

The MPC also voted to maintain government bond purchases at £435bn and corporate bond purchases at £10bn.