No move on interest rates predicted

Interest rates are likely to remain at 4.5 per cent.

09:36 02 September 2005

Interest rates are likely to remain at 4.5 per cent, economists predict.

Economists say it is unlikely that the Bank of England will announce a further cut in interest rates when the Monetary Policy Committee (MPC) concludes its meetings next week.

Last month, the bank introduced the first interest cut in two years in response to poor economic growth. Despite ongoing concerns over consumer spending, the bank is thought likely to delay any further change.

The MPC's rate decision in August was not unanimous and minutes reveal that the Bank of England's governor, Mervyn King, opposed the cut. This has led many economists to predict a cautious approach this month.

"The MPC is likely to wait and gather more evidence," John Hawkswoth from Pricewaterhouse Cooper told Reuters.

Of the 47 economists polled by Reuters, 17 thought that a further cut could, however, be expected in the final quarter of the year, in response to anticipated poor performance in the third.

A further 17 economists thought a further cut was unlikely before 2006, with February highlighted as a probable time.

Mortgage holders would welcome a further cut in interest rates, but savers will benefit from the predicted decision to hold.