Interest rates have been kept at 0.5% by the Bank of England for the 18th consecutive month, despite calls for an increase.

Rates will be kept at the record low rate for another month at least, a decision which didn’t surprise the markets, but the Bank of England is under increasing pressure from some quarters to increase the rate in order to curb inflation.

CPI inflation was 3.1% in July, above the Bank of England’s 2% target rate and some argue that an increase in rates would help to slow down the rate of inflation.

It is thought that the Bank’s nine-strong Monetary Policy Committee (MPC) focused more on the Bank’s £200 billion quantitative easing (QE) programme amid uncertainty over the path of the UK’s recovery after suggestions that economic growth may be slowing.

While the UK economy rose by a far better-than-expected 1.2% in the second quarter, recent data has pointed to sharply slower growth since then.

Fears that UK exporters will struggle to fill the gap left by weaker Government and consumer spending were highlighted earlier in the day when figures showed a record deficit in the trade of goods during July.

Recent surveys from the manufacturing and services sectors have also suggested the rally may be fading as firms begin to see much slower demand.

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