Bank of England maintains base rate at 5.25%

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The Bank of England has maintained the base rate of interest at 5.25 per cent following last months 0.25 per cent increase.

Following todays vote, the monetary policy committee agreed to keep rates at their current level, as predicted by many analysts.

However, some firms had predicted a rise in order to curb the rate of inflation and as, with the exception of Januarys decision, previous increases had taken place in months when the Bank published an inflation report.

Trevor Williams, chief economist at Lloyds TSB, said yesterday: "Shockingly we are looking for a rise."

But he admitted: "I think frankly I dont know if they will do that."

Mr Williams warned that maintaining the rate may open the economy to negative influences such as consumer expectation of higher inflation, as found in a recent Lloyds TSB survey.

He suggested that while a further increase in the early part of the year may be necessary, it could be difficult to do so in March as the Budget is due to be published.

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