MPC inflation fears on increase

THE Bank of England's Monetary Policy Committee retained its three-way split at December's meeting, but policymakers are increasingly worried about rising inflation, minutes showed.

The breakdown of votes at the BoE's meeting on December 8/9 was the same as the previous two months' meetings. Adam Posen called for an extra 50bn of quantitative easing and Andrew Sentance urged interest rates to rise to 0.75 per cent from 0.5 per cent, while the other seven MPC members voted for unchanged policy.

A growing number of policymakers were concerned about rising inflation, but not enough to justify changing policy, especially given contagion risk from the eurozone.