Minutes from the Bank of England’s Monetary Policy Committee (MPC) meeting has revealed that members voted 7-2 to keep the base rate at 0.5 per cent in October.

MPC minutes show that the governor Mervyn King, Charles Bean, Paul Tucker, Spencer Dale, Paul Fisher, David Miles and Martin Weale voted in favour of maintaining the Bank base rate, and keep the stock of asset purchases financed by central bank reserves at £200 billion.

However, MPC member Adam Posen preferred to maintain Bank base rate at 0.5 per cent and increase the size of the asset purchase programme by £50 billion, while Andrew Sentance voted for an increase in bank rate of 25 basis points, and to maintain the size of the asset purchase programme.

The minutes state that for one MPC member, the accumulated evidence since the committee had completed its £200 billion programme suggested that a further expansion was now warranted. In this member’s view, the current degree of spare capacity in the economy was sufficiently large that monetary policy could afford to encourage more rapid growth without risking an undesirable increase in underlying inflationary pressures. Absent such additional stimulus, inflation would fall well below the target in the medium term.

The stability of measures of inflation expectations and wages over several months indicated that the likelihood of their rising sufficiently to cause an overshoot of the inflation target in the medium term was smaller than previously feared.

'Another member continued to take the view that it was appropriate to begin to withdraw some of the exceptional monetary stimulus that had been provided by cutting bank rate to 0.5 per cent alongside the Committee’s programme of asset purchases,' the minutes state.