A three-way split over interest rates may be developing within the Bank of England’s Monetary Policy Committee (MPC), after it emerged that some members had discussed raising borrowing costs to stem inflation.

Minutes from the Bank's rate-setting meeting earlier this month revealed that MPC members talked about raising rates, arguing that rising inflation was enough “to consider whether an immediate rise in bank rate was warranted."

Analysts said the discussion signalled a warning shot from the more hawkish members of the committee about their intentions in the coming months.

The MPC’s Andrew Sentance and Tim Besley have the most hawkish voting record of the nine members of the rate-setting committee. Arch-dove, David Blanchflower, is likely to keep pushing for a rate cut, after emerging as the only member to vote for a reduction in June.

In the end, the MPC voted 8-1 in favour of keeping the interest rate at 5 per cent.

Philip Shaw, economist at Investec, said: "The hawks were sending a message, like a warning shot. It is quite possible they will vote for a rate rise next month, causing a three-way split."

But there was confusion over the tone of Mervyn King's letter to Chancellor Alistair Darling yesterday, which the Governor was forced to write when inflation spiked to 3.3 per cent, where Mr King warned that inflation will rise above 4 per cent later this year.

In what was perceived as a dovish letter, Mr King appeared to calm fears of an imminent rate rise when he said that if the bank rate was adjusted to bring inflation back to target within 12 months, the result would be "unnecessary volatility in output and employment."

Mr Shaw said: "As Governor, Mervyn King has a big sway over the voting, but his letter is supposed to represent the views of the committee, not just his own."

Howard Archer, chief UK and European economist at Global Insight, said: "There are signs that the MPC is becoming more divided on the future course for interest rates."

City analysts now expect rates to rise by a quarter point by November. The next rate decision will be announced on July 10.

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