Sentance remains lone supporter of interest rate rise

Dr Andrew Sentance remains the lone member of the Bank of England Monetary Policy Committee to argue for an increase in interest rates.

The minutes for the most recent meeting of the Committee show he wanted to raise rates by 0.25% to 0.75%, while the other eight members chose to maintain the level at 0.5%.

He argued the "strength of global growth" and the "rebound in domestic demand" indicated the economy could withstand any fiscal tightening.

The minutes record: "In this member's view, a well-communicated policy of gradually increasing Bank Rate would not destabilise business and consumer confidence and would reduce the risk of a sharper jolt to confidence from larger unexpected rises at a later stage."

Sentance also voted against the proposal to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn.

"For one member, the balance of risks was such that it was appropriate to start to withdraw some of the exceptional monetary stimulus provided by the easing in policy in late 2008 and 2009," the minutes state.

"Economic conditions had improved over the past twelve months and the inflation outlook had shifted sufficiently to justify beginning to raise rates gradually.

"The Q2 data suggested the recovery was gathering momentum and there was evidence that firms had found it easier to pass through price increases as demand had recovered.

"The strength in the manufacturing sector in recent months also suggested the UK economy was receiving a strong stimulus from healthy global growth."