Minutes from a policy meeting show a difference of opinion over how to combat the recession
The Bank of Englands policymakers are divided this month over the risk of inflation, it has been revealed.
Minutes from the Monetary Policy Committee's November meeting demonstrate a continuing split over how to combat the UK’s recent economic downturn.
MPC member Adam Posen once again called for a further £50 billion in quantitative easing (QE), but failed to gain backing from his rate-setting colleagues.
The details emerged after data published on Tuesday showed consumer prices inflation had increased to 3.2%, way above the Bank’s 2% target.
The minutes detailed how the committee is worried about 'future developments in commodity prices' and wage growth.
There are fears that as inflation expectations will be driven-up as people demand higher wages and companies price in higher inflation into their business models.
The minutes said: "Most members felt that the balance of risks had not altered decisively and that the right action at this meeting was to maintain the current, highly expansionary, stance of monetary policy."
Last week's inflation forecast suggested the economy should continue to recover despite Government spending cuts, with the fears over a double-dip recession easing.
The forecast also warned that inflation may spike sharply in the short-term but would back below the 2% target by the end of 2012.