Interest rate held at 0.5%

Interest rates have been kept at a record low by the Bank of England - despite concerns over inflation.

The no-change decision, which means the Bank’s base rate has been at 0.5% for 25 months, comes amid further signs of a faltering UK economic recovery.

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.

A string of gloomy updates from the retail sector continued today with profit warnings from Carpetright and Halfords, as consumers tighten their belts in the face of economic uncertainty and higher prices, particularly for fuel.

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