Concerns about inflation have been revealed in minutes from a meeting of the Bank of England’s monetary policy committee (MPC).
The monthly MPC meeting brings together the nine Bank of England rate setters to decide what the interest base rate should be set at.
At a meeting earlier this month all nine MPC members unanimously voted to keep the rate set at an all time low of 0.5 per cent and to halt pumping any more money into the economy with quantative easing, amid fears about the affect any further inflation rises could have.
Figures released on Tuesday showed that in March inflation increased to a higher than expected 3.4 per cent, well above the 2 per cent target.
The minutes, published yesterday, show committee members are worried about high oil prices pushing up the cost of living in the UK, against a weak pound.
In the minutes members said, "There was a range of views among Committee members about how the balance of risks to inflation and activity had altered over the past few months.
"Output looked more clearly to have begun to recover at the end of 2009 and with a momentum that appeared to have been carried forward into the beginning of 2010.
"Oil and some other commodity prices had risen substantially over the past two months, raising the near-term outlook for inflation.
"Although measures of households' medium-term inflation expectations had remained reasonably stable, some measures of financial market participants' inflation expectations had been drifting up.
"Given that a period of above-target inflation was in prospect at a time when monetary policy was exceptionally accommodative, this was a source of concern to some members."
As well as causing concern for Bank of England officials the inflation hike looks set to punish savers, who will struggle to find accounts with interest rates high enough to offset the effects of inflation.
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