The Bank of England's interest rate setting body considered the possibility of cutting rates when it last met, minutes have shown.

In the end, all nine members of the Bank's Monetary Policy Committee (MPC) voted in favour of keeping UK rates at their 38-year low of 4%.

The case for higher rates was "at the very least, less urgent," the MPC said, noting that inflationary pressures were subdued.

But it said there were now "several factors" that suggested a rate cut might be needed.

Change of view

The comments may raise speculation that the next move in UK rates will be downwards.

Last week the Bank's Quarterly Inflation Report lowered its forecast for both growth and inflation, and deputy governor Mervyn King hinted that a rate cut was now being considered.

"(The Bank) remains ready to take whatever action in either direction to meet the inflation target," he said at the time.

Last month, Mr King had been alone on the MPC in calling for a rate rise.

Rate debate

The MPC cited the lower inflation forecast as one reason why a rate cut could be warranted.

It also noted that the global economic recovery remained fragile.

But the MPC decided that the arguments in favour of keeping rates on hold were "more compelling".

They included the risk of stimulating the already booming UK housing market even further.

The MPC also wanted to avoid denting confidence "by implying that conditions were worse than the committee believed them to be".

The committee has an inflation target of 2.5% with one percentage point leeway either way.

At the time of the meeting inflation was 1.5%, but on Tuesday the latest figures revealed it had risen to 2%.