Interest rates unchanged at 5.25%

The Bank of England today put interest rates on hold amid signs that the current round of reductions was at or near an end.

After seven cuts in the last eight months, the bank's Monetary Policy Committee voted to leave rates unchanged at 5.25%.

The announcement, at midday, came as a bitter blow to manufacturers and unions, struggling to compete in overseas markets due to the strength of sterling,
who had been urging the bank to keep up the downward momentum on interest rates.

However, there was little surprise in the City at the decision, which comes amid signs that the worst of the downturn is over and that the
economy is beginning to pick up again.

There were also signs of an incipient housing market boom, and an unexpected upsurge in average earnings levels, which jumped above the rate the bank regards as consistent with the
government's inflation target.

While some in industry had been hoping for another quarter-point cut before the summer, increasing numbers of economists believe the
next move is more likely to be up some time later this year.