BoE keeps interest rates at historic low

THE Bank of England kept interest rates at a record low yesterday, reluctant to jeopardise a fragile economic recovery and hopeful the recent surge in inflation will prove temporary.

All but one of the 63 economists polled by Reuters last week had predicted rates would stay at 0.5%. But with inflation double the central bank’s 2% target and still rising, most expect a rate rise this year.

The European Central Bank, dealing with an inflation rate nearly half the level of Britain’s, has already signalled that an interest rate rise in imminent.