The Bank of England’s Monetary Policy Committee (MPC) has once again voted unanimously to keep the Bank Rate at 0.5%.

However, the possibility of earlier rises than initially anticipated was raised by governor Mark Carney.

Aneeka Gupta, associate director – equity & commodities strategist at ETF Securities, said: “While the Bank of England kept rates unchanged today, the language was more hawkish. The reference in the December meeting to a need for ‘modest’ tightening appears supplanted by ‘rates may need to rise somewhat earlier and by a somewhat greater degree’.

“Growth forecasts were raised and the BOE is scrapping its three-year horizon to get inflation to target and is moving back to a two year horizon. Probability for a hike in May has risen to 62.7% vs 53.3% prior to the meeting.”

Richard Pike, Phoebus Software sales and marketing director, added: “Although inflation edged back in December it is still 50% above the target set by the government. The MPC forecasts that inflation will remain at this level, at least in the short term, which puts more pressure on the bank to act. With this in mind, I expect to see a further base rate rise sooner than we would have expected at the end of 2017.

“A rise would clearly have an effect on mortgage rates for new and existing borrowers and so it will be interesting to keep an eye on movement in swap rates. Clearly, any upward movement will put further strain on indebted households and this could have a far wider effect on the UK economy in general.”