Bank of England holds interest rates at 0.5%

The Bank of England's Monetary Policy Committee today voted to maintain interest rates at 0.5%.

Barry Naisbitt, Chief Economist at Santander UK, said: "While there seems to be an increase in press stories about inflation, the Monetary Policy Committee (MPC) again voted for no change in Bank Rate today.  After the three way split vote last month, financial markets will be looking to the minutes of the meeting to see if there have been any changes in voting or in the emphasis in the review of latest economic information and concerns.

"With inflation still well above its target, and expected to rise even further in the coming months after the VAT increase, it will be interesting to see if the members have changed their concerns about the economic risks.  With the considerable uncertainty about how the bad weather and the higher rate of VAT will have affected purchases, the economic data may well be somewhat cloudy in the coming months but the MPC will need to look through that to gauge underlying trends for their decisions in the coming months.

"The February meeting together with the publication of the quarterly Inflation Report, with its detailed forecasts for inflation and economic growth, will be the next key dates."