The Bank of England kept interest rates at their record low Thursday despite rising inflation squeezing households' spending power. Inflation has soared to 4.5% in recent months - more than double the Bank's 2% target - driven higher by the rising cost of essential items such as food and fuel. But the Bank's Monetary Policy Committee (MPC) said it voted to keep rates at 0.5% for the 28th month in a row, even though a hike could help to bring inflation down back towards its target. The Bank also said it held its quantitative easing programme (printing money) at 200 billion pounds. MPC members have been concerned about the strength of the economic recovery in recent months and more signs of a slowdown have emerged since its last meeting a month ago. Recent surveys have revealed that growth in the manufacturing and the services sectors have slowed since the first quarter of 2011, analysts said. There has also been increasing evidence of a slowdown in consumer spending after a number of retailers collapsed into administration. Many economists now do not expect a rates rise until next year. But at the same time there are signs that the cost of living continues to rise, which spells trouble for cash-strapped families whose income is failing to keep pace with rising prices. But the delay in rate rise is unwelcome for savers, who will continue to suffer from low returns on their money at a time when high inflation is eroding the value of deposits, the analysts added. The bank has warned that inflation will rise above 5% later this year and remain above target throughout 2012, before falling back in 2013.