Inflation is likely to exceed projections made in the Bank of England’s most recent inflation report, the latest minutes from the Monetary Policy Committee has revealed.

The fall in consumer price index inflation to 3.4 per cent in February had been welcomed by the MPC, but was less than expected.

The Monetary Policy Committee believes high oil & gas prices, a lower inflation decrease and duty changes in the Budget means inflation in the short-term will rise higher than recent projections.

“The speed at which inflation would return towards target could not be judged with any precision and there were risks on both sides,” it adds.

The MPC warned the upside risk was that elevated inflation might be more persistent than expected and its commitment to achieving a 2 per cent rate might be questioned.

The committee voted unanimously to maintain the base rate at 0.5 per cent and the £325 billion asset purchase scheme. One member, David Miles, sought to increase the asset purchase scheme to £350 billion.