The Bank of England's Monetary Policy Committee (MPC) has kept UK interest rates on hold at a record low of 0.5%.
Economists had expected no move in rates as the latest data has shown the UK economic recovery remains weak.
The committee's decision comes despite the annual rate of inflation remaining at 4.5% in May, well above the Bank's 2% target.
It is the 28th month in a row that the Bank's nine-strong committee has left interest rates unchanged.
The MPC is torn over which is the greater problem, the weak economy, which is barely growing at 0.3%, or worsening inflation, which is squeezing consumers' purchasing power.
Some members of the committee would like interest rates to rise, arguing that longer term, higher prices will choke off any recovery.
Savers would also like to see rates go up. One lobby group, Save our Savers, says that the value of UK savings has been eroded by �50bn in the past year because of inflation and low interest rates.
Other MPC members believe that government cutbacks and tax rises will lead to lower inflation by further curbing consumers' spending power, and that energy prices, a large part of the inflation problem, will naturally start to fall back.
The chief economist of the British Chambers of Commerce, David Kern, backed the decision not to change rates.
"Tightening policy in reaction to higher utility prices and internationally generated inflation would be a major mistake," he said.
"Premature rate increases, at a time when the government is tightening fiscal policy through its deficit-cutting programme, could damage jobs and growth and should be avoided."
Source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-14062367
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