The Bank of England left interest rates steady at 3.75 per cent for the second month in a row today after having raised them for the first time in nearly four years in November.
Most analysts had predicted the bank would do nothing this month as it grappled with a new inflation target and sterling rocketing to a 11-year high against the dollar. But they expect rates to rise again in February as the economy continues to pick up speed.
Deputy Governor Sir Andrew Large even wanted to raise rates last month to cool booming consumer debt levels. Futures markets are currently betting that borrowing costs could reach 4.75 per cent by the end of the year.
This was the first Monetary Policy Committee meeting after Britain's Chancellor of the Exchequer, Mr Gordon Brown, switched the BoE's mandate to hitting a 2 per cent inflation rate as measured by a harmonised European measure instead of the old 2.5 per cent RPIX target.
The BoE made no statement with its decision.