SCOTTISH Chambers of Commerce has declared the Bank of England is “walking a very narrow line” on monetary policy and that a rise in interest rates might come “sooner rather than later”.

It emerged yesterday that three members of the Bank’s Monetary Policy Committee had voted unsuccessfully for a rise in base rates from their record low of 0.25 per cent on Wednesday.

External members Kristin Forbes, Ian McCafferty and Michael Saunders pushed for a quarter-point increase, while five MPC members voted to hold rates.

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Scottish Chambers chief executive Liz Cameron said the onus was now on Government to take steps to bolster demand and investment.

Annual UK consumer prices index inflation rose from 2.7 per cent in April to 2.9 per cent in May – moving further above the Bank’s two per cent target. It was at 0.3 per cent in May last year, before the Brexit vote.

Ms Cameron said: “It seems clear that as the consumer price index edges towards three per cent, there is a strong case being made for interest rates to rise in the near future to keep prices under control.

“The problem the Bank of England has [is] that there are as many threats in terms of raising interest rates as there are in letting the inflationary pressures run their course.”