BANK HOLDS INTEREST RATES
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| Article date: 07/10/2005 : 10:51:57 |
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The Bank of England (BoE) has announced that its Monetary Policy Committee (MPC) has decided to keep interest rates at 4.5 per cent for the second month in a row.
There have been calls from business leaders, retailers and unions for the BoE to slash rates further so as to reinvigorate a stuttering economy.
However, the MPC is concerned that a rising rate of inflation would make any further rates cuts unwise, although some experts believe that a further reduction in the interest rate is on the cards.
"Given the immediate uncertainties, we were not surprised that the Monetary Policy Committee has decided to take time to assess the economic circumstances, before taking action," commented British Chamber of Commerce director general, David Frost.
"However, it is critically important that the MPC should maintain a flexible approach, and should stand ready to counter the sharp slowdown in the pace of economic activity," he added.
The MPC's decision has been influenced by government pressure on the BoE to keep inflation below two per cent.
It came as the UK's annual growth rate dropped to its lowest level in 12 years.
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