Osborne: BoE right to hold rates

The Bank of England is right to hold interest rates at record lows of 0.5% as governor Mervyn King takes a long-term view, according to George Osborne.

The Chancellor of the Exchequer supports the MPC's interest rate policy, despite inflation surprising on the upside in April as it hit 4.5%, up 0.5% on the previous month. Osborne said: "It is always a matter of concern when inflation is above target but the governor and the MPC are doing the right thing," Bloomberg reports. "The job of the independent Monetary Policy Committee is to look through temporary factors and for medium-term trends for inflation." Following yesterday's 4.5% inflation figure, King has had to write another letter to Osborne to explain why the MPC has not yet...