9 June 2006
The base rate of interest is to remain at 4.5% the Bank of England has revealed.
It is the tenth month in a row that the base rate has gone unchanged by the Monetary Policy Committee, with the decision coming as no surprise to economists.
Barry Naisbitt, Abbey's chief economist, said that the interest rate continued to be kept at the same level because economic news over the last month had been very mixed.
"On the upward side, for example, there have been some stronger figures within manufacturing with the Engineering Employers' Federation reporting that orders and output were the strongest since the mid-1990s.
"Against this, lower stockmarket prices and a higher value of sterling suggest some downward bias on inflation."
He also said that because of the mixed signals from the economy, it would be very interesting to see how the committee members that decided the decision voted.
"Last month there was an unusual three-way split in the vote. This month Professor Nickell, who voted to cut rates in May, had left the committee, so there will be a focus on whether anyone followed his view on rates or whether more members voted to raise rates than in May," he explained.
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