Bank pledges better rate guidance

The Bank is expected to raise interest rates to 5.5% next week

The Bank of England will aim in future to give financial markets a better insight into its economic thinking.

The pledge comes amid rising pressure on the central bank, as it marks 10 years of setting the UK's monetary policy independent of the government.

Last month, the Bank was forced to write an unprecedented letter to the Chancellor explaining why inflation had risen by 1% over its target.

Analysts expect rates to be raised to 5.5% at the next meeting on 10 May.

'Hard work'

The direction of interest rates has been a source of contention among market watchers in the past, amid some criticism the Bank of England for not giving clear guidance on its intentions.

Governor Mervyn King acknowledged the nine-member body was "clearly not doing enough" about helping people understand the way they interpret financial data in an interview with the Financial Times on Thursday.

But Mr King rejected the idea of setting interest rate targets or using particular phrases in the meetings' minutes to warn of an impending base rate hike, as is the practice in the eurozone and the US.

"It will require quite a lot of hard work on our part in thinking it through, but I think we should do it," he said.