Bank of England to keep rates on hold to combat inflation

The Bank of England was expected to keep interest rates at 5.0 percent on Thursday to combat inflation driven by soaring oil and food prices despite concerns over slowing growth and the housing market, analysts said.
Economists forecast that the British central bank would make no change to its key "repo" rate - at which it lends cash to commercial banks - after a two-day meeting that begins on Wednesday. "It appears to be a stone-dead certainty that interest rates will remain at 5.0 percent even though the economy continues to weaken and house prices are currently heading south at an increasing rate," said economist Howard Archer at the Global Insight consultancy in London.
"This reflects the fact that inflation pressures and risks have increased appreciably despite the ongoing slowdown in growth." Meanwhile on Thursday, the European Central Bank was also expected to hold eurozone borrowing costs at 4.0 percent amid record eurozone inflation and signs of resilient economic growth.
The Bank of England's nine-strong monetary policy committee (MPC) kept rates at 5.0 percent last month, ruling out back-to-back cuts to help stimulate economic growth as inflation remained high amid record-high oil prices.