MercoPress. South Atlantic News Agency

Bank of England basic rate unchanged at 4%

In spite of surging house prices and ballooning consumer debt the Bank of England Monetary policy Committee decided last week to keep interest rates unchanged at 4%.

The Bank's decision was welcomed by business groups, particularly the British Chambers of Industry and the Trade Unions Congress in light of the recent strength of the British pound.

Last February 5 the Bank raised rates 0,25% to 4%.

Steve Radley chief economist of the manufacturers association praised the decision saying that "two rises in three months would have poured fuel on the fire of expectations of further rises to come, pushing the pound to damaging levels against the US dollar".

However in the banking sector there are concerns about current levels of house price inflation which are considered "unsustainable", reports the British press.

Some economists went further and speculated the decision in the Monetary Policy Committee was a "close vote".

Howard Archer from Global Insight anticipated that a 25 basis point hike is all but certain in May.

The minutes of April 8 Monetary Policy Committee will be made public next April 21.