Interest rates remain unchanged yet again

FRIDAY, APRIL 28, 2006

The Bank of England announced that interest rates are to remain unchanged at 4.5 per cent, which may be bad news to UK consumers who are struggling to pay off the interest on their debts.

The announcement, widely anticipated by analysts, means the rate has remained static since it was cut from 4.75 per cent in August of last year.

Forthcoming changes to the rate are considered unlikely by many analysts, Global Insight's chief economist Howard Archer among them.

"It currently seems a pretty safe bet that interest rates will not change for several more months to come, if at all this year," he said in anticipation of the change, on April 5th.

However, there are thoughts that the Monetary Policy Committee (MPC) may consider a small reduction if manufacturing production continues to fall.

The Office for National Statistics recently announced that manufacturing output in the UK fell by 0.2 per cent in February.

Stephen Nickell, who is set to depart the MPC in June, is believed to be the only one of the committee's nine members to have voted for a rate cut.