Interest rates remain at 6%

The Bank of England has left interest rates unchanged at 6% for the fourth month in succession.

The decision, widely expected by City analysts, comes amid signs that the pace of economic growth is slowing, underlined by official figures today showing another fall in manufacturing output.

Manufacturing output fell 0.2% in April, with a 12.5% slump in car production, the worst performance in over a decade, according to the Office for National Statistics.

Manufacturing output has fallen for four of the last five months and is just 1.6% higher than a year ago. The overall trend for both manufacturing and industrial production remains weak, with annual rises running at only around 0.5%.

While manufacturing accounts for less than a quarter of Britain's economic output, many service industries depend upon thriving factory activity.

Previously the Bank's monetary policy committee (MPC) has refrained from raising rates because of concerns that the strength of sterling was making it difficult for exporters to compete in overseas markets.

Despite the pound's recent slide on the foreign exchanges, analysts believe it has not fallen far enough for the Bank to start putting up rates.

Instead they believe the Bank is more likely to be concerned about unexpectedly weak figures for gross domestic product in the first three months of the year and a recent CBI survey suggesting that manufacturers remain pessimistic.

Recent evidence has also suggested that the booming housing market in south east England may finally be cooling, strengthening the case for the MPC not to put up rates.

Britain's borrowing costs are well above the 3.75% level set by the European Central Bank for euro zone countries. They are also high in real terms, as inflation is running at just 1.9%, well below a government target of 2.5%.