The Bank of England's decision to raise interest rates by a quarter of a point this month was unanimous, minutes of the rate-setting meeting show.

Lingering inflation risks prompted the unanimous decision to hike interest rates to 5.5 per cent - taking the cost of borrowing to a six-year high.

But some members of the Monetary Policy Committee (MPC) had considered voting for a half-point rise, the minutes say.

They decided to wait and see what effect the quarter-point rise would have.

Britain's central bank has not raised interest rates by more than 0.25 percentage points at a time since 1995, two years before it gained its independence from the government.

No member of the MPC has ever voted for a half-point rise in seven years and a move to do so would have been like hitting the panic button, analysts say.

"Some members argued that, given the uncertainties around both the outlook for inflation and the impact of interest rate changes, it was better to move cautiously," the minutes said.

"Other members were concerned that any excessive movement in rates could create downside risks to growth."

The pound was trading at $1.975 after the minutes and hit a fresh two-week high against the euro at 67.95 pence.