The Bank of England has voted 8-1 in favour of keeping interest rates on hold at 0.5%.

Ian McCafferty was the only member of the of the nine-member Monetary Policy Committee (MPC) to vote for an increase, for the second month in a row.

Mr McCafferty argued that interest rates should be raised to 0.75%.

The Bank of England is widely expected to raise interest rates in the first half of 2016, despite added pressure from some areas to raise them before hand.

James Sproule, chief economist at the Institute of Directors said: “The IoD continues to believe that the time is right to start normalising monetary policy. Inflation may be low for now, but the economy is growing strongly enough to absorb a modest increase in interest rates. Headline employment growth seems to have plateaued, but people are switching into full-time jobs and wages are continuing to outpace inflation – all signs of a tightening economy.

“This far into the recovery, it is worrying that interest rates are still at an extraordinary low. The ability to cut rates and stimulate the economy in times of instability is crucial, but with rates at their historic level of 0.5 per cent, this is almost impossible.

“All eyes are now on next week’s meeting of the Federal Reserve. Given the strength of the domestic economy, it is perhaps surprising that interest rates have not yet started to normalise in the United States either. It would be even more surprising if the Bank of England did not follow the Fed’s lead on the timing of the first rate rise. If the US makes the first move next week, the Bank of England must be prepared to act as soon as it can.”

Not worried about China

The Bank of England is not yet overly concerned about the ongoing slowdown in China's economic growth, according to the minutes from the MPC's decision meeting.

The minutes said: "Global developments do not as yet appear sufficient to alter materially the central outlook described in the August report, but the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity."

The MPC said that current growth "is being underpinned by robust real income growth, supportive credit conditions, and elevated business and consumer confidence".

Slowing quarter

The minutes also revealed that the MPC expects the UK economy to grow slightly slower than first estimated in the third quarter.

The Bank of England had forecast growth of 0.7% in the third quarter, but it now expects the economy to grow by 0.6%.