The Bank of England has left its interest rate unchanged at 5.25% as inflation continues to decline from record highs.
This move is widely expected by economists, that UK interest rates will remain at their highest level in 15 years. This is the second time since September that the BoE has decided not to raise interest rates.
Inflation has declined from double digits and in September inflation was 6.7% year-on-year, unchanged from the previous month, but much higher than other G7 economies.
Analysts predict that the upturn is over, although inflation is still more than three times the Bank of England's target of 2%.
"Rising international bond yields and geopolitical concerns (regardless of the latter's potential impact on energy prices) also point against higher rates," said George Buckley, UK and Euro Area Lead Economist at Nomura.
Some other experts think the BoE should start reducing its lending rates to help the UK economy, especially in the face of the threat of stagflation.
“There is mounting evidence that overly tight UK monetary policy could lead to price deflation within a few years and possible recession sooner. The Bank of England should act now by lowering interest rates," said Trevor Williams of the IEA's Think Institute.
British two-year government bond yields fell more than 10 basis points to their lowest level since June. Short-term bond market returns are more sensitive to interest rate movements.
Other central banks have also decided to keep rates on hold, such as the Federal Reserve and the European Central Bank.
