British rates set to stay at 5.25%

THE Bank of England is expected to hold interest rates at 5.25% next week after last month’s surprise rise, but borrowing costs could rise later in the year as policymakers try to control price pressures.

The Monetary Policy Committee voted 5-4 for January’s quarter-percentage point increase, citing worries over inflation which spiked to 3% in December.

Interest rate futures have priced in another rise by the end of March with a risk of yet higher borrowing costs. Economists are less certain.