MPC voted unanimously to hold interest rates and QE

The Bank of England’s Monetary Policy Committee (MPC) voted unanimously to hold its quantitative easing programme and maintain interest rates at their historical low, its minutes reveal.

The nine-member committee all voted in favour of not extending the asset-purchase programme beyond £200bn for the second consecutive month on March 4.

The Committee said it expected inflation to "remain well above" target in the months ahead, with the recent depreciation of sterling likely to put upward pressure on prices over the next few quarters.

However, there were differences in opinion over the inflation outlook, with some members thinking the upside risk to inflation had increased and others of the view the balance of risks had not changed.

It also said the pick-up in economic activity seen in the last quarter - which was estimated to be stronger than previously thought - is carrying over into the first quarter.

Nevertheless, the MPC said economic output was likely to remain "well below capacity for an extended period".

Sterling rose by 0.6% after release of the minutes and data showing unemployment claims fell last month at the fastest pace since 1997.

The publication of the minutes comes after deputy governor of the Bank Charles Bean warned the Government's borrowing costs could rise if quantitative easing is withdrawn.

Bean said quantitative easing has led to a full percentage point drop in the Government's cost of borrowing - sparking fears of an increase in its financing costs when the programme is withdrawn.