UK rate decision was 'unanimous'

The Bank of England's Monetary Policy Committee (MPC) voted unanimously for a rise in rates earlier this month, minutes of their meeting show.

All nine committee members backed a quarter-point rise in rates to 4.75%.

The MPC made its decision following forecasts from the Bank's inflation report, which expect inflation to hit its 2% target in two years' time.

The MPC did not discuss the half-point increase in rates which many analysts had expected to appear on the agenda.

The latest rate rise was the fifth since November last year, and most experts now expect just one more 0.25% rise this year to take rates up to 5.0%.

'Dovish'

The Bank's latest prediction for inflation - released last week - has cemented market expectations that there may not be many more interest rate rises ahead.

We got a pretty clear message last week that the Bank is more dovish than it was in May Alan Castle, Lehman Brothers

According to the minutes, the MPC said there was nothing in the inflation report or in any other news this month significantly to change the picture of strong UK economic growth.

In the UK, consumption growth seemed a little weaker than expected, but demand was still likely to grow faster than supply, the MPC said.

"We got a pretty clear message last week that the Bank is more dovish than it was in May, and the minutes just confirm that was the right interpretation," said Lehman Brothers economist Alan Castle.

"More generally, what it means is that there isn't a particularly high chance of further near-term monetary tightening, and it means all eyes will be on the inflation report in November."

Consumer concerns

The MPC's rate increases have also been part of an effort to rein back inflationary pressures stemming primarily from rampant consumer demand.

The minutes of the August meeting show that one member was still particularly worried by the record rise in consumer debt, and wanted to raise rates because of the difficulties this could pose in the future.

Ahead of the meeting, economic data had suggested that previous rate rises had had little impact on household spending and borrowing.

Retail sales rose by 1.1% in June, and total consumer debt - fuelled in recent years by historically low interest rates and high employment levels - breached the psychological £1 trillion barrier late last month.

While there have been signs that the UK's 10-year property boom is cooling, the most closely-watched surveys show that house prices are still rising, albeit more slowly.