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“In light of the reduction in oil prices and the appreciation of sterling over the past three months, it appeared that the increase in inflation over the following year would be more gradual”, the BOE said in the minutes.

On Thursday, only one member of the Monetary Policy Committee, a BoE panel which determines the setting of rates, voted to increase interest rates to 0.75%.

Amid concerns over low inflation and slowing growth in Asia, the Bank of England’s policymakers voted 8-1 to leave the rate at 0.5 percent for a 78th consecutive month and opted not to pump more money into the economy.

One committee member voted against the decision but the MPC voted unanimously to maintain an economic stimulus program which purchases £375 billion ($581.8 billion) in financial assets each year, the bank said in a statement.

In the end, only Ian McCafferty wanted to hike rates at the August meeting which ended on Wednesday, resulting in an 8-1 vote in favor of keeping rates at their record low of 0.5 percent, the BoE said.

Markets have ramped up expectations of a rise in rates several times in the past three years, only to be disappointed.

The BoE’s Inflation Report, showed officials expect annual inflation to tick back up to the 2% target by the third quarter of 2017 if interest rates rise in line with market expectations.

Similarly, factory output growth dropped in May, but the point to note is that it has now been positive for five months in a row, and the average growth since January at 3.5% is much higher than what we had seen in the second half of past year.

According to the minutes, Mr McCafferty thought that there were risks “of a more significant overshoot of inflation following its return to the target”.

Euro zone bond yields stabilised on Thursday, after a sharp rise the previous day fuelled by concern that the Federal Reserve and the Bank of England were heading for their first interest rate increases in nearly a decade.

The New Zealand dollar rose against the US dollar ahead of a speech by Reserve Bank governor Graeme Wheeler on Wednesday and a US interest rate review at the end of the week.

The inflation forecast for the first two quarters of next year has also been revised up by 0.1 percentage point to 6.9 percent and 6.1 percent respectively, with a return to within the target range by the third quarter of 2015.