Two members of the Bank of England’s monetary policy committee (MPC) voted to cut interest rates in March, it has emerged.

The majority sided with holding interest rates at 5.25 per cent earlier this month – but two members voted for a cut to five per cent as fears of a slowing economy mount.

Minutes from the meeting reveal John Gieve and David Blanchflower felt a cut was necessary amid the flailing US economy, the turn for the worse in the financial markets and increased risks of growth being hit.

However, the majority of the committee felt the “balance of risks had not changed sufficiently to merit a change” in the Bank rate.

Howard Archer, chief UK economist at Global Insight, explained the MPC was aiming to not take its eye of inflation.

“The minutes reveal elevated inflation risks meant it was too soon for the other MPC members to be comfortable about cutting interest rates again despite concerns about the growth outlook,” he said

“Furthermore, there was concern a back-to-back interest rate cut in March could be seen as indicating the MPC was more concerned with the downside risks to growth than with achieving the Bank of England’s two per cent inflation target over the medium term.”

The MPC found the housing market was slowing in line with previous assumptions, while the predictions for price inflation rises remained, while a slowing economy would eventually bring it down again.

The next MPC decision is set for April 10th. Further interest rates cuts are expected over 2008 – with the possibility of rates hitting 4.5 per cent by the end of the year being strong.

However, the Bank of England is not expected to take a leaf out of the Federal Reserve’s book, which cut rates by 0.75 percentage points yesterday, to two per cent, after previous major slashes earlier in the year.