ANOTHER rise in interest rates next month is a “done deal”, City economists said yesterday after Bank of England minutes showed its Monetary Policy Committee remains intent on pushing borrowing costs higher.

A record of the MPC’s debate two weeks ago showed its nine members voted unanimously for this month’s decision to leave the base rate unchanged at 4.5 per cent. But the hawkish tone of the minutes left no doubt that the verdict marked only a one-month reprieve for borrowers.

The Bank’s decision to pause for breath after the back-to-back increases in rates in May and June was mainly taken for tactical reasons, the minutes showed.

After two consecutive rate rises, the MPC was concerned that a third rise in a row would be interpreted incorrectly as a change in stance .

Members felt that “there was a risk that an unexpected rate increase. . . might prompt an unwarranted re-evaluation of the committee’s strategy”, the minutes said. However, all nine members agreed that “it was likely that the rate would need to increase further. . . and there was no compelling reason for delay”.

The Bank’s determination to push ahead with further increases in rates was underlined by the tough tone of the minutes. The MPC again put heavy emphasis on its view that most of the slack in the economy has been used up by strong growth, noting that it saw “little remaining spare capacity”. The remark underlined the Bank’s differences with the Treasury, which argues that the so-called “output gap” — the key measure of spare capacity — remains significant.

In another hawkish sign, the MPC made plain that it saw signs of a weakening in the housing market as only “tentative”. Members also played down recent upward revisions to the economy’s overall growth rate as well as downward revision to the pace of consumer spending.

The MPC agreed that the higher reported level of growth was mainly a result of higher estimates for government-related output and did not make an important difference to the outlook for inflationary pressures.

Members also questioned the Office for National Statistics’ cuts in estimates of the rate of consumer spending growth in the first quarter and said it was uncertain if the revised figures were correct.

George Buckley, of Deutsche Bank, said the markets’ conviction that rates will rise again next month was likely to be strengthened tomorrow when new GDP figures are expected to show growth accelerating to 1 per cent in the past three months.