10 Jan

Interest rate held at 5.5%

Interest rate held at 5.5%

The Bank of England has opted to keep interest rates unchanged in its latest meeting, it has been confirmed.

An announcement from the Bank confirmed that its monetary policy committee (MPC) base rate of interest will remain at 5.5 per cent.

The move was broadly anticipated by economists who perceive that a cut will now be due in February.

However, the MPC's decision was likely to have been on a knife edge amid clamour for a cut from struggling UK retailers, Ian McCafferty, chief economic advisor at the CBI, said.

He told the Guardian: "The economic news over Christmas was mixed, and the severity of the slowdown difficult to determine. At the same time, inflationary pressures from energy and food costs remain worrying.

"What probably tipped the balance in today's decision was the much greater calm in the money markets, following the injection of liquidity by the key central banks in the run up to the critical year end period."

The bank last cut rates in December when it trimmed a quarter point off the base rate of interest.

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