Mar 16, 9:14 AM EDT

The Bank of England has kept interest rates at a record-low 0.25 percent to avoid slowing economic growth as Britain prepares to leave the European Union


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The Bank of England has kept interest rates at a record-low 0.25 percent to avoid slowing economic growth as Britain prepares to leave the European Union

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LONDON (AP) -- The Bank of England kept its interest rates at record-lows Thursday to avoid stalling economic growth as Britain prepares to leave the European Union.

But one person on its nine-strong rate-setting committee voted for an increase - a surprise move that shows concern about the recent surge in inflation.

The bank's Monetary Policy Committee voted to keep its key rate at 0.25 percent, a day after the U.S. Federal Reserve raised its benchmark rate. The vote was 8-1, with rate-setter Kristin Forbes voting for a rise to 0.5 percent.

Her unhappiness was evident in minutes released along with the decision. The document pointed out that "one member" argued that inflation was rising fast and "likely to remain above target for at least three years."

It was the first non-unanimous vote since last summer.

Inflation has risen in part due to the pound's plunge since June, when Britain voted to leave the EU. A weaker currency makes imports more expensive.

Higher inflation is likely to eat into household income in coming months and years, particularly as wages are not growing as fast as before.

The inflation rate now stands at 1.8 percent, near the Bank of England's target of around 2 percent. Higher interest rates can weigh on inflation - but also on economic growth, a fact that presents the central bank with a dilemma.

The Bank of England has signaled it is willing to temporarily ignore the rise in inflation rather than risk reigning in the economy.

Analysts said that the vote failed to tell the whole story. Policymakers seemed to be moving closer to Forbes' view on inflation, particularly since their estimates on growth for the first quarter edged up from 0.5 percent to 0.6 percent.

For now, though, analysts like Capital Economics' Ruth Gregory suggest a rise is not imminent.

"Given the considerable degree of uncertainty surrounding the economic outlook, it still seems unlikely that the MPC will follow the U.S. Fed and raise rates anytime soon," she wrote. "A rate rise toward the end of 2018 seems more likely to us - provided that growth remains relatively resilient as we expect."

The pound surged on the news of the split vote, as currencies tend to get supported by higher rates. It rose from $1.2254 to $1.2360.

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