Interest rates held at 5pc

The Bank of England today held interest rates at 5pc, as had been widely predicted, for the fifth month in a row.

Despite worsening prospects for the economy, the monetary policy committee (MPC) left rates unchanged as it continues its battle against inflation.

Growth stalled between April and June and the Organisation for Economic Co-operation and Development said this week that the UK would be the only major economy to fall into recession this year.

But the MPC decision comes against a backdrop of soaring inflation, with the current 4.4pc figure expected to hit 5pc soon following the latest round of price rises hikes by domestic energy firms.

Stephen Robertson, director-general of the British Retail Consortium, said keeping rates steady was “the right decision for now”.

But he added: “The Bank should not risk making a bad situation worse by delaying a rate cut any longer than is absolutely necessary.”

Courtesy of EDP

05 September 2008