Bank freezes interest rates

Posted: 08 Nov 2007 14:19:07 GMT

The Bank of England has maintained the base rate of interest in November, holding it at 5.75 per cent.

The Bank of England has maintained the base rate of interest in November, holding it at 5.75 per cent.

It is the fourth consecutive month that rates have been held and today's decision was widely anticipated.

However, most analysts believe that a cut will be announced soon, although it remains unclear when this will come about.

Abbey has revealed that it thinks the Bank will continue its 'wait and see' approach but says that more will be known with the publication of the Inflation Report.

"The Inflation Report, to be published on the 14th November, should give some key insights into how the MPC [Monetary Policy Committee] members view the possible implications of recent events for the economy and interest rates," said Barry Naisbitt from the firm.

"Inflation has fallen to 1.8 per cent and the uncertainty created by the turmoil in global financial markets could dampen activity growth, particularly in the US. As a result, the focus of a few months ago of the possibility of higher rates has changed to the discussion of when rates will be cut. 

"I expect that the MPC will want to see more evidence on how the economic picture is developing before deciding to act," he concluded.

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