Interest rates remain the same

The Bank of England today decided to leave interest rates unchanged at 4.5 per cent.

Analysts had widely anticipated the decision given last month's quarter percentage point cut in base rates.

The decision by the Monetary Policy Committee (MPC) was based on growing strength in the housing market indicated by rising prices in August as well as signs of recovery in the manufacturing industry.

Last month's decision by the nine-member MPC to cut base rates by a quarter point 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.