INTEREST rates showed no signing in shifting after it emerged yesterday that only one policymaker at the Bank of England voted for a change earlier this month.

David Walton called for the cost of borrowing to rise to 4.75 per cent when the Bank's Monetary Policy Committee (MPC) met earlier this month because of the threat of rising inflation, according to the minutes of the meeting. But he was outvoted by the other seven members, who expressed concerns that the recent rise in inflation and inflation expectations could "prove to be temporary".

Economists yesterday said it marked a "less hawkish" approach to interest rates than the markets had come to expect in recent months, although the next move is still expected to be up.

Gavin Redknap, of Standard Chartered Bank, said: "With the threat of inflation now being downplayed, it appears that the Bank is inclining towards a lengthy period of inaction rather than preparing the market for a rate hike as soon as August."

The MPC voted to keep interest rates on hold at 4.5 per cent for the tenth month in a row. The MPC sets the cost of borrowing each month to keep inflation at its target of two per cent, although inflation rose to a seven-month high of 2.2 per cent last month.