The prospect of further rises in borrowing costs heightened today as The Bank of England's Monetary Policy Committee disclosed that just one vote kept interest rates on hold this month.

Four of the nine members including the Governor Mervyn King and deputy Sir John Gieve voted for a 0.25 per cent rise while the remaining five voted to keep rates unchanged at 5.5 per cent. It is the first time since August 2005 that Mr King has been out-voted.

The vote was much closer than expected with most expecting a 7-2 vote in favour of a hold and analysts immediately said the markets should "batten down the hatches" for a July rate rise. The pound rose sharply in response gaining 2 cents in early trading to $1.9902.

Ian Stannard at BNP Paribas said: “The minutes were far more hawkish than the market was looking for.”

ING economist James Knightley said: “This vote is a major surprise and suggests that a July hike is probable, as we have been forecasting, with clear upside risks thereafter.”

Howard Archer of Global Insight said: "A further 25 basis points interest rate hike in July now looks highly likely, given that four MPC members were in favour of raising interest rates in June. Furthermore, the minutes give the impression that for some of the other MPC members, it was a question of when to raise interest rates again rather than if."

He added: "There is clearly a very real risk that interest rates will reach 6 per cent before the end of the year.

The split decision came amid concerns that four previous increases in interest rates since last summer - including the latest rise in May - were failing to slow economic growth.

The minutes said: “The economy was still growing robustly despite the rise in official interest rates since August.”

Members of the committee pushing for a rise - including the Governor - argued that there was “no compelling reason to wait” with another hike expected by the markets.

Those voting to hold rates argued that pushing up rates for the second successive month could act as a threat to growth.

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