The pound dipped this afternoon after the latest release of the minutes from the Bank of England's rate-setting monetary policy committee (MPC) showed no change in stance.

This afternoon the dollar was at 1.7411 against the pound while the euro stood at 1.4636.

The movement followed news that the MPC had again voted eight-to-one to keep interest rates on hold this month, with only one member advocating a rate cut.

Mr Nickell's argument was based on the belief that there was "spare capacity" in the economy, which meant a rate cut would be sustainable without impacting on inflation.

However, the general consensus remained that the economy was strengthening without the need for any changes to the rate, particularly in the context of the impact of rising energy prices.

"There was some concern that a reduction in interest rates at this stage would provide further support to the housing market and consumption at a time when GDP [gross domestic product] growth was already strengthening, and that would increase the probability of inflation rising above the target in the medium term," the minutes reported.

"In particular, it was hard to judge how much supply capacity had been and would be eroded by the increase in energy prices.

"In the light of these considerations, it seemed appropriate to leave the [interest] rate unchanged."

The MPC has not changed the interest rate, which stands at 4.5 per cent, since August last year.