Trevor Williams, chief economist, Lloyds TSB Corporate Markets

“The Bank of England’s decision to hold rates this month was widely expected, given the need to deal with the problem of rising inflation. Of course, the credit crisis is still a clear and present danger to economic growth, which suggests that rates should be cut, but inflation is now causing real concern, both in the UK and around the world.

“The worry is that worsening inflation figures in the months ahead could push inflation expectations up even further, making a rise in actual inflation a self fulfilling prophecy. Cutting base rates in this environment is not a realistic option. So the MPC was right not to move.”

Roger Bootle, of Capital Economics

"The cost of keeping interest rates higher for longer in order to slay the inflation dragon will be a more severe and longer-lasting downturn in activity. The odds of an outright recession are shortening by the day and may now be as much as 1 in 2."

Graeme Leach, Chief Economist at the Institute of Directors

“All in all, the right call. With the economy weakening the MPC won’t get any thanks for leaving interest rates on hold, but they really didn’t have any other choice. Inflation is well above target and rising and any easing in monetary policy would have undermined the CPI outlook over the next 2 years –and with it, the credibility of the MPC. We’re still some way off the time when the economic slowdown is sufficient to bring inflation under control.”

Adam Lent , Head of Economic and Social Affairs at the TUC

“This is very disappointing – and simply puts off the cuts that will be needed to keep growth growing.”

John Hawksworth, Head of Macroeconomics at PricewaterhouseCoopers LLP

"Today's decision was understandable given that inflation is above target and set to rise further over the next few months. But the economy is clearly slowing and the housing market has deteriorated sharply, so the MPC will need to cut rates later this year to head off the risk of a recession."

Ian McCafferty, the CBI’s Chief Economic Adviser

“The Bank had little option this month other than to leave interest rates on hold - oil and commodity prices are still of great concern and businesses are having to raise pricesas profit margins get squeezed further. We have yet to reach the peak in inflationary pressure, even though we still expect the rate of inflation to fall back markedly through 2009.”

Stuart Porteous, Head of RBS Group Economics

"The April inflation figure effectively eliminated the chances of another rate cut this year. After all, cutting interest rates and the imminent prospect of writing letters to the Chancellor to explain why inflation is above target are uneasy bedfellows. Inflation seems likely to keep the MPC's fingers away from the 'cut' button at least until the end of the year. This means that the MPC is almost certain to keep rates on hold, even if the domestic economy starts to feel the pinch."

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

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