Rates on hold

The Bank of England’s Monetary Policy Committee has decided to keep interest rates on hold.

The decision came as a surprise to some observers, who had thought the MPC would be swayed by data released earlier this week showing house prices still rising quickly.

It is likely to be welcomed by hard-pressed manufacturers competing with European companies, although sterling remains at a record high level against the euro.

Kate Barker, chief economic adviser at the CBI, said: ‘This was the right decision and should bolster long-term economic growth. Firms are now making investment decisions that will come to fruition over the next two years. With sterling rising to new peaks, a further rate rise would have hit these plans hard.’