Interest rates kept on hold

The Bank of England has kept interest rates on hold at 4.75 per cent today.

12:03 09 May 2005

The Bank of England has kept interest rates on hold at 4.75 per cent today.

The decision, delayed by four days to avoid a clash with the general election, was predicted by many economists after weak retails sales and manufacturing data.

It is the ninth month in a row that interest rates have been kept on ice, although for the last two months the bank's Paul Tucker and deputy governor Andrew Large have been voting for a hike in interest rates to five per cent.

And, after data showing that the CPI measure of inflation had risen to 1.9 per cent in March, economists had suggested that these two would be joined by other members of the interest rate setting Monetary Policy Committee (MPC) this month.

But subsequent data on manufacturing, house prices and retail sales quickly led analysts to reverse this opinion and predict an interest rate freeze.

Steven Andrew, an economist at F&C Asset Management, said the decision was a "foregone conclusion".