The Bank of England has kept interest rates in Britain on hold at 0.5%.
The BBC reports the decision was expected.
Most recent figures showed that Consumer Prices Index inflation rose to 3.2% in October, well above the bank's target rate of 2%.
Recent official economic data showed that manufacturing output grew by 0.6% in October, the fastest pace since March.
Meanwhile, the overall UK economy grew by 0.8% between July -September.
VAT is to rise to 20% from 17.5% on 1 January.
