THE vote by the Bank of England's rate-setting committee earlier this month to keep interest rates on hold was unanimous, it emerged yesterday.

Despite fears about high consumer demand and the rising house prices, all nine members of the bank's monetary policy committee (MPC) decided to stick to their gradual approach towards raising rates.

However, it emerged that members gave serious consideration to increasing the cost of borrowing from its current level of four per cent.

The minutes of the meeting show concern that the pick-up in house price inflation and household debt could become unsustainable, increasing the likelihood of an abrupt adjustment.

One member believed an immediate rise may have a greater impact on household behaviour and avoid the need for a larger rise later.

However, the meeting showed members chose to keep rates on hold amid concerns that an increase would surprise markets and could lead to further upward pressure on the level of sterling.

The MPC said inflationary pressures could be expected to build up, but they had not done so sufficiently to warrant a further increase in the rate.

The report said: "To raise the rate at this month's meeting would be a surprise, which might prompt an unwarranted revaluation of the committee's strategy by market participants and might as a result generate further pressure on sterling."