Bank ‘considered half-point interest rate hike’

According to the minutes of the MPC’s most recent meeting, an increase in the cost of borrowing to 5.75 per cent was up for discussion as the committee assessed the right way to counter rising inflation rates.

In the event, the MPC was unanimous in its decision to raise interest rates by a quarter-point to 5.5 per cent, but this increase has already heightened the financial pressures on consumers facing debt management difficulties around the UK.

The minutes of the May meeting of the MPC read: “For some members, the question was whether bank rate should be increased by 25 basis points or whether there was a case for a rise of 50 basis points – given the upside risks to inflation over the medium term and the buoyant outlook for growth and demand.”

With millions of credit consumers struggling to clear debt arrears in the UK, the MPC has raised interest rates by a quarter-point four times since August of last year.