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Bank governor hints that interest rates have peaked

10 November 2004
The governor of the Bank of England has hinted that interest rates might have peaked at 4.75 per cent.

Most analysts predicted that interest rates would rise to 5.0 or 5.25 per cent before stalling and then declining.

But after five rises in interest rate rises in nine months, the Bank has held rates firm at 4.75 per cent for three months in a row now.

"It appears that the economy lost some momentum during the autumn," Mervyn King, governor of the Bank said today.

"The labour market has been a little softer in recent months, employment growth has slowed, house prices have on average stop rising - they have been broadly flat over the last two months - and a slowdown in the housing market is evident in virtually all the indicators."

This has been taken as a signal by some that rates will not rise above their current level in this economic cycle.

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