Bank of England policymakers considered the case for both easing and tightening policy this month, before voting eight to one to keep interest rates at a record low of 0.5 per cent, minutes showed.
Monetary Policy Committee member Andrew Sentance called for a 25 basis point rate hike for the third month running, minutes of the BoE's August 4-5 meeting showed.
But the majority of the Committee thought it would be best to keep interest rates on hold and maintain the central bank's £200bn asset purchase scheme because of significant risks on both sides of the inflation outlook.
"These members stood ready to respond in either direction as the balance of risks evolved," the minutes said.
The August minutes are likely to reinforce expectations that interest rates will remain on hold well into next year.
The BoE cut interest rates to a record low in March last year and embarked on an unprecedented quantitative easing programme to pull Britain out of its deepest recession since World War 2.
While the economy has started to grow again, most analysts anticipate a slow and difficult recovery.
The MPC considered arguments in favour of further monetary easing because credit conditions looked as if they would remain tighter than the central bank had anticipated in May.
The government's budget in June had also cut the growth outlook and the weakening in business and consumer confidence might also weigh on activity.
Sentance, however, argued that the recovery was already gathering momentum and there was a risk that inflation expectations could become de-anchored.
Inflation has been surprisingly strong this year, posting a rate of 3.1 per cent in July, which forced BoE Governor Mervyn King to write a public letter of explanation to the government for the third time this year.
"Increases in the prices of some agricultural commodities in the days leading up to the meeting suggested that the increased volatility of CPI inflation seen in recent years might continue," the minutes said.