Bank of England leaves interest rates unchanged

The Bank of England has left its benchmark interest rate unchanged at 5.0% for the second month in a row, as growth gathers pace and inflation heads downwards.

Today's decision was in line with expectations and keeps borrowing costs at a 22-year low. Recent minutes from the central bank showed that
the nine-member committee believes interest rates at their current level neither stimulate nor restrain
demand.

Although growth quickened during the second quarter, the bank is unlikely to raise rates before
the recovery is seen to be secure. At the same time, stiffening competition among retailers and falling import
prices are likely to drive inflation lower.

Figures today reporting an unexpected decline in manufacturing output during June show the recovery is
gradual rather than sudden. Factory output fell by 0.2% in June, the first decline since January. Output had been expected to rise by 0.2%.

The Bank of England has lowered rates by two-and-a-half percentage points in a series of reductions since
October aimed at boosting growth. Minutes of the last meeting show all committee members
were in favour of keeping interest rates on hold.