The British Retail Consortium has slammed the banks' decision and said it is wrong for the bank to regard the consumer slowdown as 'tentative'.
BRC director-general Kevin Hawkins said: 'This could well be an increase too far. The effects of the recent, quick-fire series of rate rises are now beginning to be felt. It's clear there is more impact that has yet to feed through to sales and consumer confidence.'
He added: 'Food inflation is falling and non-food prices are down every month this year. It's clear inflationary pressure is not coming from the high street. This rise could cause too great a slowdown, the full effects of which will only be felt in the second half of this year.'
The rise was forecast by City analysts, because inflation is still above the Government's target rate of 2 per cent.