Published by Zeb BhamMervyn King has defended the decision to maintain the interest rate at a record low of 0.5 per cent, despite rising inflation, in news that may interest fx dealers.

The comments came as the Bank of England (BoE) governor addressed financial experts in London."Subdued rates of increase in average earnings, as well as remarkably - some might say disturbingly - low growth rates of broad money have provided strong signals that inflation will fall back in due course," he said.Mr King added the BoE is mindful of any changes to the economy and suggested action will be taken as soon as it is possible to do so, noting that if the bank rate had been increased to bring inflation closer to where it should be then living standards may have declined.Mortgage firm Alexander Hall's chief operating officer Andy Pratt recently suggested the base rate was unlikely to be changed until inflation begins to naturally decline.