The Bank of England has resisted the temptation to cut interest rates for the second month in a row and kept rates on hold at 5%.

The decision was made despite evidence that the manufacturing, property and retail sectors are continuing to struggle in the current economic climate.

But with rising food and fuel prices the Bank is concerned about the rate of inflation, which currently stands at 2.5%, well above the government's target of 2.0%.

The British Chambers of Commerce expressed disappointment that rates had not been cut once more, labelling it a "mistake" but manufacturing organisation EEF backed the decision.

"The economy has been through a series of shocks since the credit crisis hit last summer and the Bank has been right so far in responding with a measured approach on rates," said its chief economist Steve Radley.