Rising inflation deepened the divide at Bank of England on Thursday as three policymakers voted to hike interest rates.

The Monetary Policy Committee held interest rates unchanged at 0.25% but minutes of the meeting showed three of its eight members - Michael Saunders, Ian McCafferty and Kristin Forbes - voting for a rise in interest rates to 0.5%.

The MPC has not raised rates since July 2007 - nearly a decade ago.

The minutes showed there were “arguments in favour of a moderate tightening” in policy due to rising inflation, which hit 2.9% this week and already exceeding the Bank’s expectations.

The trio also pointed to a strong jobs market as an argument for removing some of the stimulus poured in by the Bank after last year’s Brexit vote.

The FTSE 100 fell 1.2% following the details of the decision while the pound spiked, cutting nearly all of its earlier losses against the dollar.

But some analysts say a hike is unlikely until Brexit talks are well under way.

ING’s James Knightley said: “One of these dissenters (Forbes) leaves the MPC later this month and with the economic and political uncertainty so high we doubt there will be a consensus backing higher interest rates until there is much greater clarity on what Brexit means.”