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Wednesday, 17 April, 2002, 10:45 GMT 11:45 UK
Bank chiefs unanimous on holding rates
Bank of England interior
The Bank left rates unchanged at 4%
All nine members of the Bank of England's interest rate-setting committee voted to keep rates unchanged in April.

Minutes of the Monetary Policy Committee's (MPC) 4 April meeting showed that members felt financial news in the UK in the previous month had been "mixed" - with strong consumer demand, but with the manufacturing sector still struggling.

Key inflationary indicators, such as household borrowing and house prices, were strong, while unemployment had risen less than expected, but members said the case for increasing interest rates to avoid a consumer boom was "not yet pressing".

The MPC members voted 9-0 to keep interest rates at 4% - their lowest levels for nearly 40 years.

Tax rise?

"For some members, recent news taken as a whole added some weight to the arguments for an increase in rates, though it was by no means decisive; most, however took a more neutral view," the minutes said.

The minutes were published as Chancellor Gordon Brown prepared to announce the latest Budget, which is widely expected to include an increase in personal taxes.

Any increase in tax is likely to be seen as having a cooling effect on consumer spending, and could persuade the MPC to keep interest rates unchanged at their next meeting.

Looking at the global economy, MPC members agreed that the economic recovery in the United States was stronger than had been expected.

"That hoped-for recovery now seemed already to be established. Sentiment was improving globally as a result, and forecasts of growth this year were being revised upwards," the minutes said.

However, there were concerns over rising oil prices and the recent tension in the Middle East.

The MPC said it was particularly worried that if oil prices were to continue to rise, it would have a significant impact on global activity.

See also:

17 Apr 02 | UK Politics
Brown prepares for crucial Budget
17 Apr 02 | Business
UK unemployment falls
16 Apr 02 | Business
UK inflation edges higher
04 Apr 02 | Business
UK rates kept on hold
25 Mar 02 | Business
US recovery 'here to stay'
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