16 August 2007
The Bank of England has voted unanimously to keep interest rates at 5.75% this month.
According to minutes from this month's Monetary Policy Committee meeting, all nine of its members voted for no change to the current base rate, which has experienced five increases in the past year.
The decision to keep rates as they are has been greeted with surprise from many city analysts who had expected interest rates to climb to 6% within the next few months.
Yet a shock fall in inflation triggered by competition in food prices ended many consumers' fears that interest rates would have to be put up once again.
Figures from the Office of National Statistics showed that consumer price index inflation fell to 1.9% in July from 2.4% in June.
Commenting on the situation, Jonathan Loynes at Capital Economics said another rate rise before September was looking increasingly unlikely.
He said: "For now, we still think that one more hike later this year remains likely, but the call is getting closer and a September move now looks out of the question," he said.
Meanwhile Simon Ward of New Star added: "Coupled with yesterday's dramatic inflation drop and a surprise further fall in average earnings growth to a four-year low, this news strengthens our belief that interest rates have peaked for the year at 5.75%."
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