Interest rates held for 10th month

The Bank of England today kept interest rates on hold at 6% for the 10th consecutive month, as City forecasters predicted.

The decision, by the bank's nine-member monetary policy committee was announced, as usual, promptly at midday and commentators believe interest rates will stay pegged until after the Budget in the spring.

Analysts believe that signs of slower domestic and world growth rule out the prospect of an increase in borrowing costs.

And in the City, despite the bank governor, Sir Edward George, steadfastly refusing to signal that rates have peaked, there is a growing belief that the next move could be down.

In its last quarterly inflation report last month, the bank said the outlook for prices was "a little softer", raising hopes of a rate cut in the new year.

Nick Parsons, chief currency strategist at Commerzbank, said: "Our prediction is that we will see a first birthday at 6%, which will be the longest period rates have remained unchanged."

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