MercoPress. South Atlantic News Agency

Bank of England keeps interest rate at 4,75%

The Bank of England Monetary Policy Committee decided this Thursday to keep the basic rate unchanged at 4,75% amid signs of a slowing economy.

The Bank's lending rate has remained unchanged for the last four months after having risen five times between November 2003 and August 2004.

The decision was expected by markets and industry.

However the Confederation of British Industry is concerned with the weakness of the US dollar which affects British exports in sterling.

With retail sales cooling and the prices of houses dropping, some analysts believe that interest rates will remain unchanged for several months ahead until "confidence returns to the economy".

A recent CBI survey found that future orders in November were at their lowest level in a year and the British Chambers of Commerce BCC said the decision to leave rates on hold was "inadequate" as far as manufacturers were concerned.

"This was clearly the minimum necessary for the economy", said BCC director general David Frost who did not rule out the possibility "that interest rates have peaked and, if pressures on industry worsen, they may have to come down".