FURTHER interest rate cuts now seem even less likely after Bank of England minutes showed this month's vote went to the wire again.

Minutes from the Bank's rate-setting meeting show that only five of the nine-strong committee voted to cut rates to 4.5 per cent.

Bank of England governor Mervyn King was among the four who voted against - the first time he has gone against the majority.

Economists had expected members to be unanimously in favour of the first rate cut in two years. It should knock £15 a month off a £100,000 mortgage for borrowers whose lenders have passed it on.

F&C Asset Management head of strategy Paul Niven said: "The minutes further reduce the chance of a near-term reduction in rates. The market has already moved from pricing in three rate cuts from the peak just a couple of months ago to now pricing in flat rates at 4.5 per cent into 2006.

"Increasingly, it appears that the UK rate cut was anomalous, particularly in light of last week's inflation report and recent inflation data pushing through target levels," he added.

Investec chief economist Philip Shaw said: "The closeness of the vote was quite staggering, especially given this was the turn in the interest rate cycle following several rises.

"It's testimony to the monetary policy set-up as it shows that interest rates are set by committee, and not by one person."

First published: August 18