Interest rate held at record low 0.5pc

The Bank of England has frozen the interest rate at 0.5 per cent again.

The number of Bank of England policymakers backing an interest rate hike increased last month as inflation with Spencer Dale, chief economist at the Bank, joined fellow MPC members Andrew Sentance and Martin Weale in voting to lift rates.

With inflation rising, pressure to increase the rate has been growing.

Edward Menashy, Chief Economist at Charles Stanley said: “The downward revision to fourth quarter 2010 GDP from -0.5 per cent to -0.6 per cent when most economists, including those at the Bank of England, had expected an improvement that had clearly not materialised, confused further deliberations.”

"The Bank of England is sticking rigidly to its view that the rate of inflation should be declining by the year end due to the dropping out of higher base factors and the existence of ample spare capacity."