UK rates tipped to stay on hold

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UK interest rates are tipped to stay on hold when the Bank of England makes its latest rates decision later.

Recent stock market volatility is unlikely to influence the decision either way, analysts say.

But while most expect no change to the base rate this month, there was a similar consensus before the bank's surprise quarter-point rise in January.

Whatever happens, the bank is widely expected to make further moves this year to curb inflation.

UK inflation fell to 2.7% last month, down from an 11-year high of 3%.

Still, the figure remains well above the government's 2% target.

'Reluctant'

Despite the continuing need to dampen inflation, most analysts expect the bank's rate-setting Monetary Policy Committee (MPC) to delay further interest rate rises at Thursday's meeting.

The MPC voted by 7-2 to keep the rate steady in February, adopting a "wait-and-see" approach.

"The gist of the minutes to February's meeting was that the MPC really had time to sit and wait, to assess evidence to see whether upward risks to inflation were crystallising," said Investec economist Philip Shaw.

"There has been very little information to suggest this."

Mr Shaw added that recent volatility in the global stock markets was unlikely to carry any influence in the decision.

"Whilst the events of the past week may make policymakers a little more reluctant to raise rates, I don't think they are at the sort of levels where it has a particularly marked effect on their judgement," he said.

The Bank of England has increased interest rates on three occasions since last summer, in August, November and January and by a quarter of a percentage point each time.