Junes monthly meeting sees the Bank of England’s Monetary Policy Committee keep interest rates at 0.5% for the 27th month in a row.

Recent data has underlined worries about the UK’s economic recovery, which analysts took as a sign that the Bank would leave rates unchanged.

Despite the annual rate of inflation rising to 4.5% in April, up from 4% in March, and well above the Bank’s 2% target. Continuing high inflation still makes a rate rise likely this year, although with speculation that inflation could rise to above 5% in the coming few months due to increasing food and utility prices a rate increase could happen sooner.

Our thoughts are that due to the still high unemployment numbers and the pressure of increased household costs, interest rates could be placed on hold until early 2012.

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