UK interest rates held at record low of 0.5%
The Bank of England's Monetary Policy Committee has kept UK interest rates once more at a record low of 0.5%.
There has been no change to the Bank rate for 25 months, despite the fact that inflation is currently more than twice the Bank's 2% target rate.
No new quantitative easing measures were unveiled.
Last month, three MPC members again voted for a rise, and it was revealed that consumer prices inflation rose again in February, to 4.4%.
Inflation continues to be boosted by rising commodities prices - not least the oil price, which is being driven higher both by strong demand from Asia and by supply worries due to the Middle East uprisings.
The Bank faces a dilemma over what to do on interest rates, and has chosen once again to wait and see.
Raising rates slows down inflation - and it is the Bank's job to keep inflation in check.
But it also increases the cost of borrowing, and there are concerns this may tip the UK back into recession, especially after the shock 0.5% contraction in the economy seen in the last quarter of 2010.
"The Bank is right to look through the short-term rises in inflation and continue holding fire on rates for the time being," said Jeegar Kakkad, economist at manufacturers' organisation EEF.
"The current combination of unrest, upheaval and uncertainty we are seeing around the world poses significant risks to growth, whilst, at home, the full effects of fiscal tightening and the squeeze on consumers is still to be felt."
The British Chambers of Commerce (BCC) agreed.
"Businesses will welcome the MPC's decision," said BCC chief economist David Kern, who called for any rate rise to be delayed until next year.
"Premature rate increases will have negative effects on growth and jobs. With wage increases remaining subdued, we strongly urge the MPC to hold its nerve and avoid taking any action that may risk derailing the recovery."
However, other economists fear that unless the Bank takes action soon, the current high inflation rate may become locked in by higher inflation expectations and faster wage increases.
The Bank of England's dilemma
- The Bank of England's interest rate-setters on the Monetary Policy Committee (MPC) have voted to keep UK interest rates at 0.5%, where they have stood for the past two years.
- Member Andrew Sentance has been alone in voting for a rate rise for most of the past year. But in 2011, others have been joining him. For the last two months, the motion to keep rates unchanged was carried by six votes to three.
- Those voting for a rate rise are concerned that there is not yet any sign of inflation coming down. Raising rates slows down inflation - and it is the Bank's job to keep inflation measured by the Consumer Prices Index at around 2%.
- The majority view has been that the rate rise should be delayed because there is a risk that the weak economy could send the inflation below 2%. This fear was stoked by the contraction in the UK at the end of 2010.