Israel holds rates at 4.25%

The Bank of Israel's rate-setting board voted on Monday to keep rates at 4.25%, despite concern over rising inflation.

Consumer prices rose by 0.6% in December, putting inflation at 3.4% for last year - above the 3% upper limit of the central bank's target range.

But the central bank expects inflation to fall back within the target range in the second half of 2008 and to be 2.5% for the year.

"The decision to leave the interest rate unchanged is intended to bring inflation, measured over the