The Bank of England’s Monetary Policy Committee (MPC) has held interest rates at 0.5 per cent for the 25th month running.
The MPC has held off raising rates despite inflation climbing to 4% in January - twice the target set by the Gorvenment.
According to minutes of its meeting last month, most members of the MPC believe that inflation will come down of its own accord because of the weak economy. There are also fears that hiking rates now could hinder the recovery.
However, many economists believe the MPC will be forced to raise rates this year to head off further inflation increases. Economists suggest that rises of 0.75% in June and to 1% in October are likely.
The MPC took its decision against a background of interest rates increase across the world. The European Central Bank, which has pegged its rate at 1% for 23 months, is expected to raise it next month.
