Bank Of England Leave Intrest Rates For 6th Month In A Row

30 November -0001

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The Bank of England has left interest rates on hold at 4.75% for a sixth month in a row.

The Bank's Monetary Policy Committee (MPC) decided to take no action amid mixed signals from the economy.

Interest rates were raised five times between November 2003 and August 2004 in an effort to keep inflation near the MPC's 2.0% target level.

However, some economists are predicting a further rise in the borrowing rate later this year.

Wednesday, data showing that manufacturing output rose last month at its fastest rate since May planting the view that economic growth was stronger than forecast.

This coupled with recent house surveys from the Halifax and Nationwide indicating prices are still rising. The economic data suggests that the Bank should continue to adopt a wait and see approach.

The British Chambers of Commerce (BCC) has expressed concern at the apparent clamouring in some quarters" for early interest rate increases, saying that these demands should be firmly resisted.

The BCC still maintain that manufacturing still faces extremely serious problems and is performing poorly, in spite of the recent revised figures.

Bank of England governor Mervyn King has recently warned against placing too much weight on one month's data, suggesting the MPC will wait for a clearer economic picture to emerge.

The city economists see next week's inflation report from the MPC as key in assessing further interest rate levels.

source bbc

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