Surprise for markets as trio of Bank of England gurus call for interest rates to rise

Three Bank of England officials have called for UK interest rates to rise in a surprise move that signals policymakers are becoming more concerned about higher inflation even as the economy slows.

Bank policymakers voted 5-3 on Thursday to keep interest rates on hold at a record low of 0.25pc.

External members Ian McCafferty and Michael Saunders joined MIT professor Kristin Forbes in voting to raise rates by 0.25 percentage points to 0.5pc.

The last time there were three dissenting votes to tighten policy was May 2011.

The Monetary Policy Committee (MPC) said inflation had picked up more quickly than expected in since its last economic forecast in May.

Inflation, as measured by the consumer prices index (CPI) stood at 2.9pc in May.

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UK retail sales fall more sharply than expected in May

UK retail sales fell more sharply than forecast last month, data showed today, in what is the latest sign of the growing hit to the economy from rising inflation since the Brexit vote.

Data from the ONS showed retail sales volumes fell 1.2pc month-on- month in May, a heavier fall than forecasts suggested (-0.8pc).