The Bank of England has decided to maintain interest rates at an all-time low for the 23rd consecutive month and ignored those calling for an immediate hike to tackle growing inflation.
 
Despite growing concern that the monetary policy committee (MPC) is losing hold of its ability to control inflation, which was almost double the target of 2 per cent in December at 3.7 per cent, the base rate will remain at 0.5 per cent for at least another month.
 
While speculation has been mounting in recent weeks that the rate hike will happen sooner rather than later, most analysts ahead of the decision doubted it would be today.
 
Duncan Higgins, currency analyst at CaxtonFX, says markets have a rate rise priced in for May because the recovery is still too fragile to cope with one sooner.
 
Disappointing UK GDP results for the fourth quarter of 2010, which showed negative growth, will likely have weighed on the minds of MPC members as they came to today’s decision.
 
Since the results came out, more optimistic data in the form of increased activity in all three Purchase Managers’ Indices for January made some consider a rate rise more likely.
 
In addition, last month Martin Weale joined Andrew Sentence in his hawkish stance and voted for a 0.25 per cent base rate rise.
 
But governor of the Bank of England Mervyn King has not been shy in the last few weeks in saying that global inflationary pressures should not force the committee to act prematurely.
 
Minutes of today’s meeting will not be available for another fortnight, but analysts, economists and traders alike will be interested to know the vote breakdown and whether 'Team Hawk' is gaining any ground.