Bank of England holds interest rates at 5.25%
The Bank of England's interest rate setting Monetary Policy Committee (MPC) has announced it will keep base rate on hold at 5.25 per cent in March.
The market had been expecting a rise in interest rates over the coming months, but recent falls in the stock market, commodity prices and a fall in inflation have reduced the chances of a rate rise in the immediate future.
The MPC raises and lowers interest rates in an effort to keep inflation as close to the government's two per cent target as possible.
Recently inflation has been running far ahead of this, seeing the bank raise interest rates from 4.5 per cent to 5.25 per cent over a five-month period.
However, last month figures emerged showing inflation was falling again, and since then a stock market 'correction' has seen share prices and commodity prices fall.
Additionally, a series of energy suppliers have entered a price war (full story) seeing domestic energy prices fall for the first time in years.
Ahead of the decision economists were predicting a hold in interest rates, and some went as far as to predict a fall in the months to come.
"With continued turmoil in global equity markets, the MPC are unlikely to raise rates again this week and I still expect a cut in rates by year end," said Ian Kernohan, economist at Royal London Asset Management.
Last month the Bank voted 7-2 for a hold in interest rates. Since then two members of the committee, David Blanchflower and Rachel Lomax, have made speeches indicating they are strongly against future rises.
Economists are predicting another split vote this month.
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