Yesterday’s decision by the Bank of England to retain interest rates at 4.5% was not unexpected and was given a ‘cautious welcome’ by the British Chamber of Commerce.

July saw inflation rise to 2.3%, the highest rate for five years and the first time it had exceeded the Bank’s 2% target since the current consumer prices index measure was introduced in December 2003

Record oil prices could edge inflation higher still in the months ahead which will probably keep interest rates unchanged, at least in the immediate future.