Bank of England holds interest rates at 4.5%

The Bank of England left interest rates unchanged at 4.5 per cent as expected today.

The Bank of England left interest rates unchanged at 4.5 per cent as expected today.

Some economists say the monetary policy committee could make another quarter percentage point cut as early as November as economic growth looks likely to fall short of the banks forecast.

Surprisingly weak industrial production data today supported that view. But other figures from the Halifax, the nation's largest mortgage lender, suggested the August cut may already be lifting the property market.

House prices rose 1.2 per cent in September, their fourth straight monthly gain. "There is likely to have been an intense debate within the committee about the downside risks to the growth outlook and the upside risks to inflation," said Howard Archer, economist at Global Insight.

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"Future developments in consumer spending hold the key," he said.

Although many expect another cut, some as soon as next month, other analysts argue the worst is over for the UK economy and the central bank will raise rates early next year as the US Federal Reserve is now doing.

Expectations are even rising for a European Central Bank rate rise by the middle of next year after more than two years, although it is not likely to move rates from 2 per cent when it concludes its meeting later today.