UK holds bank rates steady as inflation rises

The UK consumer prices index (CPI) inflation rose 4.4 per cent in July from 4.2 per cent in June, according to figures from the Office for National Statistics (ONS). However, the retail prices index (RPI) measure remained unchanged at 5 per cent.

At constant tax rates, CPI inflation was 2.8 per cent in July.

Despite inflation rising marginally, the Bank of England today maintained its interest rates at the current record low of 0.5 per cent.

The Bank of England has held rates there since March 2009, static for more than two years.

The clothing and footwear category was one of the major contributors to inflation, which saw its biggest annual increase since records began in 1997.

The UK government had targeted inflation at 2 per cent and was confident that inflation would return to its target level in the next two years.