The BoE’s Monetary Policy Committee has been under mounting pressure to increase borrowing costs to fight off rising inflation, but today opted against a base rate rise.

Dr Ros Altmann, director general of Saga, says the MPC again failed to show it wants to control inflation.

“It is disappointing the Bank of England has once again ignored the warning signs,” she says.

“With the UK economy showing every intention of shrugging off December’s poor GDP figures, and with high and ever-increasing inflation strengthening its already firm grip on the UK economy, the MPC has missed yet another opportunity to signal that it really is serious about controlling inflation.

“It also missed a chance to give savers at least some crumb of comfort that their suffering may be nearer an end.”

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Meanwhile, Royal London Asset Management economist Ian Kernohan believes the MPC must now increase rates soon if recent economic trends continue.

“We were not expecting a move at this meeting, however, assuming the economic recovery signalled by the main business surveys remains on track, interest rates look set to rise later in the year,” he says.

“Next week’s Inflation Report should help prepare the ground for such a move and will be a tad more hawkish than the November report.”

However, IFA Informed Choice says it was not expecting the MPC to raise rates given the short-term nature of inflation, and thinks rate setters made the right decision.

“Price inflation is currently being driven by a combination of temporary measures (such as VAT) and imported inflation (including commodity and food prices),” it says.

“To increase domestic interest rates today would have damaged consumer confidence and done little to bring down inflation.”