Baseline interest rates set by the Bank of England remain on hold at a record low of 0.5 per cent today after a meeting of the bank’s rate-setting Monetary Policy Committee (MPC).

The widely expected news comes as better signs from the economy and a heating up housing market are starting to put upward pressure on rates.

Bank chief Mark Carney says the MPC will not start to consider raising rates until unemployment falls below seven per cent. Last month it fell to 7.1 per cent.

David Kern, chief economist at the British Chambers of Commerce, said: "Linking forward guidance exclusively to unemployment has proved counter-productive.

"Focusing instead on a range of key indicators would increase its effectiveness, reinforce business confidence, and pour cold water on the cynicism that many City analysts have demonstrated."

UK interest rates have been hold since March 2009.