Fears over deflation thwarted Bank of England vote to raise interest rate

Falling oil prices driving inflation down to 0.5% in January, forced Martin Weale and Ian McCafferty to back down

Fears that Britain could sink into a damaging "deflationary spiral" have stayed the hands of Bank of England policymakers who had pushed for an early interest rate rise, monetary policy committee member Martin Weale has revealed.

Weale was one of two MPC members who had consistently voted for higher borrowing costs from August last year, as the economy recovered. But after falling oil prices drove inflation down to 0.5% in January, Weale and his fellow anti-inflation "hawk", Ian McCafferty, backed down and agreed that rates should remain at their record low of 0.5%.

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