Paul Tucker, a senior Bank of England official, changed sides for a second time at this month's meeting of the Bank of England's interest- setting committee to vote with the majority to hold the Bank's official interest rate unchanged for a ninth month at 4.75 per cent.

In March and April Mr Tucker, previously an advocate of no change, had switched his stance to join Sir Andrew Large, a deputy governor of the Bank, one of the Bank's deputy governors in voting for a quarter-point increase. Many economists saw this as a pointer that opinion on the committee was swinging towards an increase this summer.

This month Mr Tucker changed his mind again leaving Sir Andrew alone, while his eight colleagues on the committee all opted for no change.

Presenting the Bank's quarterly Inflation Report last week, Mervyn King, the Bank's governor, refused to let journalists ask Mr Tucker why he had been voting to raise the cost of borrowing.

Minutes of this month's meeting published yesterday showed "one member" - presumably Mr Tucker - arguing that the near-term risk of consumption and output growth falling warranted leaving interest rates unchanged even though the long-term risk of rising inflation remained.

The Bank, he added, should remain ready to "act to offset incipient inflationary pressures".

This put him in the line with other committee members who attributed the jump in inflation in the last two months to temporary factors including the knock-on impact of the rising oil price.

They noted "little sign" that inflation expectations were in danger of moving significantly away from the (two per cent) target.

If later these price rises were followed by a second round of wage and price increase, the Bank could act accordingly.

That left Sir Andrew alone to make the case for a higher interest rate now. The minutes quote him arguing that "the succession of stronger than expected ( inflation) outturns suggested that demand was higher relative to supply than had been expected".

Second-round wage and price increases could not be ruled out. Higher interest rates "would also help slow households' persistently rapid accumulation of unsecured debt, hence reducing the risk of a sharp fall in demand at some later date".

Yesterday Sir Andrew sounded a separate warning of a potential threat to the world's financial system caused by the recent explosion in the use of credit derivatives.

In a speech to bankers, he said: "Credit risk transfer has introduced new holders of credit risk, such as hedge funds and insurance companies, at a timer when market depth is untested."