UK rates held at 5.25%

8 March 2007

In good news for borrowers, UK interest rates have been held unchanged at 5.25% by the Bank of England's Monetary Policy Committee.

Many in the City though still predict a further rate rise in the next few months.

With UK inflation rates falling to 2.7% in February down from an 11-year high of 3%, it still remains above the target of 2%, hence why the expectations of further increases.

The latest inflation figures are to be released later than usual this month, on 20 March, so the rate-setters are unlikely to have been given a preview of them.

The committee is also likely to have wanted to know what is in Chancellor Gordon Brown's budget on 21 March before raising rates again.

The Bank of England recently indicated that interest rates would need to rise one more time, to keep inflation near its long-term target of 2%.