Interest rates held at 5.25%

The Bank of England has kept interest rates at 5.25 per cent.

The British Retail Consortium welcomed the news. BRC director-general Kevin Hawkins said: 'This is a sensible decision. It will give the retail sector some much-needed breathing space after the shock of last month's hike. A further hit to consumer confidence would have come at a significant price.'

In the past seven months, rates have risen three times in an attempt to bring inflation under control.

Hawkins said: 'The only price pressure coming from the high street is from food. That is being driven by a temporary increase in worldwide commodity prices, which will come down of their own accord. An increase now would have done nothing to help the bank achieve its inflation target.'