Bank keeps rates on hold

Interest rates have been kept on hold, giving borrowers some welcome breathing space after last month's quarter point rise.

The Bank of England has held rates at 5.5 per cent after a meeting of its Monetary Policy Committee (MPC) .

Borrowers and homeowners have been hit with four hikes in interest rates since last August.

However, most economists expect the MPC will raise rates to 5.75 per cent in July as the Bank looks to bring Consumer Price Index inflation - currently at 2.8 per cent - back towards its 2 per cent target within two years.

Members of the committee have expressed concerns over pricing confidence among manufacturers - despite the sector forming a small share of the economy - adding to inflationary pressure as well as strong demand growth, prospects for energy and import prices, and the degree of spare capacity in the economy.

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