Interest rates on hold

The Bank of England has decided to keep the Bank rate on hold at 5.25%, as widely expected in the face of quickening inflation.

Many consumer-facing businesses will have been hoping for a second successive cut in interest rates, to stimulate customer spending.

"This decision is not surprising, but we believe it is mistaken given the worsening international and domestic situation," said David Kern, economic adviser to the British Chambers of Commerce.

"The MPC has missed an important opportunity to underpin business and consumer confidence, and limit the potential damage to the economy," he added.

However, manufacturers have welcomed the decision.

"With manufacturing and the rest of the economy continuing to expand and inflationary pressures growing the Bank was right to hold rates today," said Steve Radley, chief economist at manufacturers' group EEF.

"Unless the evidence shows the economy slowing faster than expected, the Bank should continue to reduce rates gradually."