Inflation fears trump growth concerns among Bank of England’s MPC members

Investors are betting on just one more rates cut this year, which could bring stagnation, undermining government efforts to drive the economy forward

• Bank of England holds interest rate at 4.75%

There was no doubt in the City that the Bank of England would hold interest rates at 4.75%. A spurt in annual inflation last month and a sharp rise in wages in the autumn meant its monetary policy committee (MPC) was widely expected to hold fire on a third rate cut this year.

What many will find more surprising is the yawning gap between the six committee members who voted to hold rates and the three who voted for a reduction.