BANK of England chief economist Andy Haldane wrongfooted financial markets by voting for an immediate quarter-point rise in base rates at this week’s Monetary Policy Committee meeting.

The Bank announced yesterday that UK base rates had been held at 0.5 per cent at its latest meeting, which ended on Wednesday. This decision was in line with expectations.

However, while MPC members Ian McCafferty and Michael Saunders had been expected to continue to vote unsuccessfully for a rise in base rates at the latest meeting, Mr Haldane’s vote surprised economists and financial markets.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said of this week’s six-three vote to hold rates: “An unexpected development saw a narrower six-three vote, from seven-two, in favour of unchanged interest rates...With interest rates down at 0.5%, the Bank of England would clearly like to gradually normalise monetary policy given that it is essentially an emergency low rate.”

However, Mr Archer declared the case for a rate hike at the MPC’s next meeting in August “is not yet done and dusted, and could yet be data dependent”.

He added: “Recent UK economic news is far from 100%-convincing on the economy’s improvement. Recent slowing earnings growth is also a significant factor, despite the MPC’s confidence that pay will gradually pick up further out. Increasing global trade tensions, as well as ongoing Brexit uncertainties, reinforce the case for Bank caution on hiking rates.”

Mr Archer said there was “likely to be only one interest-rate hike in 2018, be it in August or November”.

He added: “We expect the Bank to raise interest rates twice in 2019.”