6 September 2007
Interest rates in the UK are widely expected to remain on hold this month, as the Bank of England's Monetary Policy Committee (MPC) meets to discuss the nation's economy today.
City analysts predict the MPC is not likely to raise rates again in September, with the status quo of 5.75% expected to remain for the second consecutive month.
In July, inflation fell to 1.9% surprising economists and prompting MPC members to keep rates at 5.75% in August.
Interest rates have risen five times since August 2006, with the latest rise in July taking rates up from 5.5% to 5.75%.
"The ongoing problems and uncertainties in credit and financial markets substantially boost the case for the Bank of England to sit tight," said Global Insight analyst Howard Archer.
Recently banks have shown caution in lending, following a crisis in the US sub-prime mortgage sector.
On the ground, this has led to higher interest rates as bank's reticence to lend money kicks in. Any rise in interest rates could exacerbate this situation, analysts claim.
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