UK interest rates have been kept at the record low of 0.5% again by the Bank of England's Monetary Policy Committee.

Economists had expected the decision, as recent data has underlined worries about the strength of the UK's recovery. The decision comes despite the annual rate of inflation rising to 4.5% in April, up from 4% in March, and well above the Bank's 2% target. It is the 27th straight month that the bank has left rates unchanged.

Meanwhile, the European Central Bank's president, Jean-Claude Trichet, has signalled that its interest rate could rise next month. The ECB on Thursday held rates at 1.25%, but Mr Trichet said the bank would maintain "strong vigilance" on inflation - widely interpreted as a signal to the markets that rates will be raised at the next meeting.

James Knightley, economist at ING, said that continuing high UK inflation also made a rate rise by the MPC likely this year.

Poor UK economic data has led some economists to "push back expectations for the timing of the first UK rate hike to March next year", he said.

he said.

Economists say policymakers face a difficult choice: keep rates on hold to help the economy, or raise them to cool.......Click HERE to read more