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BoE delays interest rate decision

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by Kay Mitchell

The Bank of England’s Monetary Policy Committee (MPC) is to postpone its interest rate decision meeting.

The Bank was set to hold its two-day rate-setting meeting on 5 and 6 May but it will now be held on 7 and 10 May, as a result of today‘s general election.

However, the Bank is expected to keep UK interest rates on hold at the historically low level of 0.5% for the 14th consecutive month.

The latest official figures show the UK’s rate of inflation rose to 3.4% in March, up from 3% in February and again exceeding the Government’s target of 2%.

The rate, which is based on the Consumer Prices Index (CPI) nudged towards the 14-month high of 3.5% recorded in January.

The CPI inflation rate is a benchmark for the Bank of England’s MPC.

Earlier this year, the Bank’s Governor, Mervyn King, dismissed fears that soaring inflation that would demand a significant rise in interest rates in the months ahead, saying that inflation was likely to fall back to its 2% target in the second half of 2010, and then fall further.

With the outlook unchanged, interest rates are expected to remain at or near the current historic low of 0.5% in the short-term.

The Bank of England will announce its decision at 12.00pm on Monday.

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News posted: May 6, 2010

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