BoE holds rates at 4.75 per cent

The Bank of England has kept interest rates at 4.75 per cent for the eighth month running but many economists expect another rise once the May 5 general election is out of the way.

All 47 analysts polled by Reuters had predicted yesterday's lack of action, especially as recent reports have suggested that typically free-spending British consumers are feeling the pinch from five rate hikes in one-and-a-half-years.

Two members of the bank's Monetary Policy Committee wanted to raise rates by a quarter percentage point last month. But the majority probably wanted to wait until a clearer picture of the economy emerges as data in the new year period are difficult to interpret.

Economists said that, while another rate rise to keep inflation in check seemed likely if the economy develops according to the MPC's forecasts, there was a risk that the marked slowdown in consumer spending becomes entrenched.

In this case, the next rate move may have to be down.