The government's preferred measure of inflation, and the one the Bank of England takes into account when setting interest rates, is the consumer price index (CPI). The pound rose on foreign exchanges following the interest rate decision, hitting almost £1.40 against the dollar. Over the past month, several members of the US central bank, the Federal Reserve, have argued that three 0.25% interest rate rises scheduled for this year could become four or five. There is every prospect that the US economic data will continue to strengthen, increasing the potential for higher interest rates. However, the eurozone looks unlikely to increase interest rates until its recovery is more firmly anchored.

Source: The Guardian February 08, 2018 12:25 UTC