Bank tipped to keep rates on hold

06 October 2004
In what looks set to be good news for mortgage holders, the Bank of England is expected to hold interest rates at 4.75 per cent this week for the second month in a row.

In the last 12 months the Bank's interest rate setting Monetary Policy Committee has raised the cost of borrowing five times, to try and keep inflation on track.

But, for this month at least, experts are tipping the committee to hold rates firm at 4.75 per cent.

A total of 41 analysts polled by news agency Reuters predicted that there would be no change in the base rate when the MPC meets on Thursday.

A raft of recent evidence has suggested that the economy is starting to slow down.

In fact, a growing number of economists are now predicting that interest rates have already peaked, though most are still forecasting a further quarter point rise this year.

Recent financial data has indicated that growth in manufacturing and services has slowed to its weakest pace in more than a year.

Kate Barker, a member of the MPC, told Reuters last month that the central bank may be coming to a point where it would no longer be tightening rates, hinting that rates might already be at the so-called neutral level.

Last month some MPC members considered arguments for raising rates before voting unanimously for no change in the base rate of borrowing.
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