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The Bank of England’s Monetary Policy Committee has voted to hold interest rates at 5pc, as it grapples with soaring inflation coupled with an economic downturn.

The MPC’s decision to leave rates unchanged today was widely predicted by economists. The Consumer Price Index reached 3.3pc last month, way above the Bank of England’s target level of 2pc, and a level which required Mervyn King, the Bank’s Governor, to write a letter of explanation to the Chancellor Alistair Darling.

The last time that interest rates changed was in April, when the MPC voted to cut interest rates by 0.25pc to 5pc.

Howard Archer, chief economist at Global Insight, said that the Bank would be “in no hurry at this stage” to move rates again.