Interest rates remain unchanged

The Bank of England leaves interest rates steady at 4.5 per cent today.

12:05 08 September 2005

The Bank of England has kept interest rates steady at 4.5 per cent today.

Given last month's quarter point cut, analysts widely predicted that the Monetary Policy Committee (MPC) would hold the current base rate.

And that view was shown to be wise when the Bank announced its decision to freeze rates at 12:00 BST.

Growing strength in the housing market indicated by rising prices in August as well as signs of recovery in the manufacturing industry has helped to bring about this month's decision.

The decision by the nine-member MPC to cut base rates by a quarter point in August was the first rate cut since July 2003 and only went through on a five to four margin. Bank of England governor Mervyn King was among those who voted against the cut last month due to worries over rising levels of inflation.

Forty-seven financial analysts polled by Reuters unanimously predicted that interest rates would remain unchanged today but there was uncertainty over next month's decision.

The poll showed that 17 analysts expected a further rate cut this year while 17 believed the Bank of England would wait until 2006 for another cut. Only eight analysts felt next month's interest rates would rise.