Bank to hold interest rates

08 February 2005
The Bank of England is expected to keep interest rates on hold at Thursday's rate-setting meeting, allowing homeowners and businesses in the UK to breathe a sigh of relief.

The Monetary Policy Committee (MPC) is expected to keep base rates at 4.75 per cent for the sixth month in a row.

This is good news for homeowners, as their mortgages will not increase in value.

Philip Shaw, an economist at Investec, stated that there was "insufficient ammunition" to effect either a rise or fall in interest rates this month.

"On balance we still believe that base rates will remain at 4.75 per cent for the rest of the year," he told BBC News Online.

Mr Shaw was, however, reluctant to rule out a further tightening in the next six months.

Recent figures showing unexpected economic growth of 0.7 per cent in the last quarter, an unexpected increase, have also ruled out the possibility of a rates cut.

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