UK rates held steady despite inflation

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UK rates held steady despite inflation

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UK interest rates are to remain at a record low of 0.5 percent.

Bank of England policymakers at their monthly meeting judged Britain’s economic recovery is still too weak to cope with a rate rise.

It was being considered because UK inflation has surged to four percent, twice the central bank’s target.

Britain’s economy suffered a surprise contraction at the end of last year and faces public spending cuts.

Some Bank policymakers have indicated that they want to see how the economy performs in the first quarter before changing policy.

However, most economists expect the central bank to raise rates before the end of the year and investors are betting on a rise in May.

The European Central Bank, dealing with a much smaller inflation problem, has already signalled that an interest rate rise is imminent.

The benchmark cost of borrowing in the UK has stood at 0.5 percent since March 2009 when the Bank slashed rates to an all-time low and embarked on an unprecedented programme of quantitative easing.