UK interest rates kept on hold at 0.5%
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UK Economy
UK interest rates have been kept at the record low of 0.5% again by the Bank of England's Monetary Policy Committee.
Data this week pointed to a slowdown in growth in manufacturing, construction and services, which economists took as a sign that the Bank would not change rates with the recovery still weak
This is despite the fact that inflation is currently at 4%, double the Bank's target rate.
The MPC did not reveal any new quantitative easing measures either.
The Bank has faced a difficult choice - either keep interest rates low to try to aid the economic recovery, or raise them to try to cool inflation.
Raising rates takes demand out of the economy and slows down inflation.
But it also increases the cost of borrowing, and there are concerns this may tip the UK back into recession.
The economy shrank by 0.5% at the end of last year, but returned to growth in the first three months of 2011, expanding by 0.5%.
"The middling growth figures for the start of this year were unlikely to tilt the balance of votes towards a rise this month," commented Lee Hopley, chief economist at the manufacturers' organisation, the EEF.
"So long as the underlying economic recovery remains murky the case for a rate rise can't be made until it becomes clearer."