Kingsbridge

UK interest rates have been left on hold at 5 per cent, following May's meeting of the Bank of England's Monetary Policy Committee (MPC).

The base rate freeze had been widely predicted, although analysts now expect that rates will be reduced by a quarter of a percentage point to 4.75 per cent in June.

The Bank has decided to focus its attention on inflation risks, despite growing evidence of slower economic growth.

Surging food and energy prices have pushed Consumer Price Index inflation above the government's 2 per cent target rate.

Ian McCafferty, chief economic adviser to the CBI business group, told BBC News: "The latest data shows the economy is slowing, albeit only gradually, and at the same time inflationary pressures continue to mount.

"The Bank faced a difficult decision, but it is no surprise that rates were kept on hold this month."

But the decision to keep rates steady did not go down well with the British Chambers of Commerce.

"This decision was a mistake given the serious threats to economic growth," said BCC adviser David Kern.

The article Bank leaves rates unchanged at 5% originally appeared on 999 Today