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Interest rates frozen by the MPC for another month

The Bank of England has left UK interest rates on hold at 4.75 per cent for the eighth month running.

The decision by the Bank’s Monetary Policy Committee was widely expected given subdued UK inflation and a slowdown in consumer spending.

Skipton Building Society chief executive John Goodfellow says: “Economic analysts are still predicting that we will see an increase in the Bank of England’s base rate some time in 2005. However, with consumer spending remaining relatively slow, the weak retail market will have been a major factor in today’s decision to keep rates at 4.75 per cent.

“It is next month, when the inflation report is due – which has previously had a great influence on the MPC’s discussions – where the chance of a rate increase will be higher.”

Derbyshire Building Society head of intermediary support and development Tony Capon says: “The logic behind leaving rates on hold is that the MPC is seeing continued evidence of a housing slowdown and there have been signs of a faltering in global growth.

“Homeowners can breathe another sigh of relief today. An increase of a quarter per cent would have resulted in borrowers with a 100,000 mortgage having to find an extra 20.00 per month in mortgage payments.”

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