The Bank of England kept interest rates unchanged today at 5.75 per cent, but analysts say that another rate rise remains on the cards in the coming months.

The move is widely expected to be seen as only a temporary reprieve for mortgage holders and businesses, amid surging activity in the manufacturing sector and stubbornly high food and energy prices. Some analysts have suggested that a fresh rate rise could come as soon as next month.

However, deep disagreements among the members of the Bank's Monetary Policy Committee last month helped to build expectations that the Committee would sit on its hands today, at the end of a 12-month period in which it has raised interest rates five times.

The MPC is currently divided into three groups. Three of its nine members, including Rachel Lomax, one of the Bank's two deputy governors, voted against July's quarter-point rise, and would be expected to have voted to keep rates steady again this month. They have strongly argued that more time is needed to assess the impact of the series of interest rate changes over the past year.

At the other end of the spectrum are the "superhawks" Andrew Sentance and Tim Besley, who have been in the vanguard of the move to tighter policy. They have argued in recent weeks that the economy needs to slow to a pace of expansion below its long-term average if inflation, which currently stands at 2.4 per cent, is to return to its 2 per cent target in the medium term. Mervyn King, the Bank's Governor, is sympathetic to their arguments, as is Sir John Gieve.

In the middle, though, are a group of "swing voters" who will probably have mostly opposed a rate rise for this month, in part on the grounds that such a move would come as an unnecessary shock to the markets.

Data released over the past month has broadly supported the hawks' position. Growth has been above its trend level, at 0.8 per cent in the second quarter, while inflation has not fallen as much as expected. Oil prices set a new record yesterday, and manufacturing output, according to this weeks CIPS/NTC purchasing managers' index, is rising at its highest level for three years, with output prices rising at their fastest pace since the series began in 1992.

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