Economists believe that the Bank of England is unlikely to cut interest rates for the second consecutive month due to concerns over inflation.

Analysts believe that the Bank's nine-strong Monetary Policy Committee will vote to leave the official cost of borrowing at 5.25% as it bids to tackle rising household costs.

Inflation was in the spotlight last week as it emerged that both oil and wheat prices reached new record levels, threatening to put further pressure on the UK's all important cost of living index.

Last month, a surge in petrol and food prices were blamed for the increase in the official rate of inflation to 2.2%, which continues to hover above the Bank's 2% target.

And some commentators believe that March's inflation rate could rise even further as double-digit price rises for gas and electricity which were announced earlier this year begin to bite.

The members of the MPC have already voiced their fears over the rate of inflation, in a series of speeches made over the last few weeks.

Andrew Sentance told business leaders in Devon that "our mandate is to keep inflation on target", while his colleague Rachel Lomax said that the Bank will need to tolerate slower demand to keep inflation on target if "inflation expectations appear to be persistently elevated".

More evidence of a consumer slowdown that could prompt a rate cut came last month from market researchers GfK NOP who said soaring fuel and home energy prices have helped sink confidence levels to a 13-year low last month.

Meanwhile, the CBI's distributive trades survey revealed that retail sales growth ground to a halt in February for the first time in more than a year.

However, Philip Shaw, an economist at Investec Securities, said he thought the Bank would opt to keep rates on hold.

He said: "A back-to-back cut in rates looks very unlikely at this week's meeting and we expect the Bank rate to remain at 5.25%.

"Inflation developments have worsened over the past few weeks, having been aggravated by oil and wheat prices, plus a further weakening in sterling."

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