Interest rate-setters at the Bank of England have opted to freeze the baseline cost of borrowing at 0.5 per cent, despite signs that the UK economy is continuing to warm up.

Interest rates, which influence the level at which banks lend to consumers and businesses, have been frozen at a historical low since the Credit Crunch in an effort to help consumers and businesses to spend.

But a series of indicators in recent months show consumer confidence rising and businesses trading at levels not seen since pre-Crunch times. In addition, house price growth in parts of London and the South East is topping 10 per cent a year.

Bank governor Mark Carney has eased fears of an imminent rate rise; analysts say it could be 12 months before action is taken. Even then, rates will rise slowly, Mr Carney is on record as saying.