THE BANK of England held interest rates at a record low 0.5 per cent despite a surge in inflation.

A majority of BoE policymakers continued to judge the economic recovery too shaky to withstand higher rates, betting that inflation of 4.4 per cent – more than double the target – will ease once oil and food prices come down.

“Serious concerns and uncertainties over the growth outlook deterred the MPC from acting despite the pressure for higher interest rates . . . from elevated and still rising consumer price inflation,” said IHS Global Insight economist Howard Archer.

There was scant market reaction to the BoE decision, as all but one of 67 economists polled had expected it to leave its key rate at 0.5 per cent.