The Bank of England voted unanimously to keep interest rates on hold this month for the first time since July last year, after two policymakers unexpectedly dropped their call for higher rates in the face of tumbling inflation. A slump in oil prices caused British inflation last month to drop far more than expected to a 14-year low of 0.5 per cent, far below the Bank of England's 2 per cent target and a level that brings outright falls in prices into prospect. At the central bank's January 7-8 monetary policy committee meeting, Martin Weale and Ian McCafferty, who had been calling for an end to record-low interest rates since August, said a rate increase now might cause below-target inflation to become entrenched. British government bond prices jumped and the pound fell against the US dollar and the euro on the news. The decision by Weale and McCafferty to back off on a rate rise came even as labour market data showed the unemployment rate falling to its lowest in more than six years at 5.8 per cent and wages outstripping inflation for a third month. They said their decision to stop voting for an increase in rates was "finely balanced", but they did not want to take any chances. "They noted the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in bank rate at the current juncture," the minutes of the monetary policy committee meeting, released yesterday, said. Bank of England governor Mark Carney has said inflation could turn negative in the coming months but that the central bank saw no need for more stimulus and still planned to raise rates within the foreseeable future.