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Wednesday, November 17, 1999 Published at 09:59 GMT

Business: The Economy

Bank considered bigger rate rise

Bank of England governor Eddie George chairs a split committee

The Bank of England's Monetary Policy Committee (MPC) was overwhelmingly in favour of raising interest rates by 0.25% a fortnight ago.

The committee of experts voted eight to one in favour of the rise - with some of the debate at their two day meeting focusing on whether to post a larger 0.5% rise.

The tone of the discussion and the vote were revealed in the minutes of the meeting released on Wednesday.

[ image: Chancellor Gordon Brown has set the MPC an inflation target]
Chancellor Gordon Brown has set the MPC an inflation target
DeAnne Julius, the MPC's most prominent dove, voted against the proposal, preferring instead to keep rates on hold.

The minutes show that a number of members discussed the merits of voting to raise rates by 0.5%.

But survey evidence pointing to a slowing of demand growth, and the likely reaction of the pound to such a move, led them to prefer a smaller rise.

Chancellor Gordon Brown has set the MPC the task of using interest rates to keep the inflation rate in the UK as close as possible to 2.5%.

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