Interest rates were kept on hold again, as expected, but a growing number of economists now expect the Bank of England to increase them over the next few months.
The Bank’s rate-setting Monetary Policy Committee (MPC) pegged rates at an historic low of 0.5% for the 23rd month in a row after its two-day meeting.
The MPC has a delicate balancing act with the economic in such a fragile state. Leave rates as they are for much longer and there is a fear that inflation, now 1.3 percentage points above the Bank’s two per cent target, will continue to rise.
Increase them and there is a risk that any recovery will be chocked off, tipping the economy into a much-feared double-dip recession.
