Agence France-Presse . London

The Bank of England on Thursday kept its key interest rate at 5.25 per cent as the central bank opted for a wait-and-see approach to rising inflation and slowing growth.

The announcement was in line with market expectations for no change and followed a quarter-point cut in February that came amid growing concerns over the risk of a sharp slowdown in economic activity.

The decision from the BoE’s monetary policy committee meeting preceded a rate announcement from the European Central Bank at 1245 GMT. Analysts expect eurozone borrowing costs to be frozen at 4.00 per cent.

‘Current elevated inflation risks meant that it was too soon for the Bank of England to be comfortable about cutting interest rates again despite serious concerns about the growth outlook,’ said Global Insight economist Howard Archer.

The British central bank refrained from cutting rates this month because of simmering inflationary pressures which stem from record high oil prices, surging food costs and rising household bills, analysts said.

The BoE’s chief job is to keep 12-month inflation close to a government-set target of 2.0 per cent. Annual inflation rose to 2.2 per cent in January from 2.1 percent in December.

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