The Bank of England has released the minutes of the monthly meeting of the rate setting Monetary Policy Committee (MPC), showing the committee voted to keep interest rates constant in January by 8 to 1.

The MPC is expected to cut interest rates from 5.5 per cent to 5.25 per cent next month, although the minutes from January's meeting suggest that cuts beyond this are unlikely.

The minutes stated that most members of the MPC voted against changing interest rates in January because the short term risk of inflation had worsened markedly.

Last night Mervyn King again spoke of his concerns about inflation.

The US Federal Reserve yesterday cut its interest rates by ¾ of a per cent, the largest cut for over twenty years.