According to the minutes of a meeting earlier this month, Bank of England policy makers were divided on the issue, reaching a three way split.

Seven of the Monetary Police Committee (MPC) members voted for no changes to the interest rate and no additional stimulus spending.

Adam Posen voted in favour of £50bn of extra quantitative easing (QE), the bank's main stimulus measure, whilst Andrew Sentance again voted in favour of a quarter- point rise in rates to 0.75%.

 Figures released on Tuesday showed that Consumer Prices Index (CPI)inflation had increased to 3.2% in October well above the target rate of 2%.

Also discussed at the meetings which took place on 3-4 November was the potential of recent above-target inflation generating an increase in inflation expectations.

"Some committee members were concerned that recent inflation outturns and the higher near-term profile meant that the risk to inflation expectations was somewhat greater than previously thought," the minutes detailed.

However, the committee also considered that, despite"surprisingly" strong third-quarter GDP growth of 0.8%, there was still a "significant margin" of spare capacity in the economy and "medium-terminflation expectations remained anchored". As a result, the majority of MPC members favoured maintaining the Bank's existing policy. "We see no reason to change our view that the Bank of England is most likely to keep interest rates down at 0.50% until at least late-2011"Said Howard Archer, chief UK and European economist at IHS Global Insight.