No change in UK rates

The Bank of England's monetary policy committee has decided to leave interest rates unchanged at 6%.

The move was in line with expectations, given growing evidence of lower inflationary pressure.

It is the sixth month in a row that the MPC has left rates at 6%.

The nine MPC members started their monthly interest rate policy meeting on Wednesday.

During the course of the two day meeting they looked at all aspects of the UK economy's performance before deciding on an interest rate change to ensure that inflation remains close to 2.5%.

Underlying UK inflation is currently at 2.2%.

The MPC has raised the key interest rate four times since last September, in an attempt to stop the economy overheating.

Mixed messages

The committee had a mix of conflicting data to digest.

There is evidence of lower inflationary pressures.

Official figures showed average earnings growth fell to 4.6% in May from 5.1% in April.

House prices too seem to be easing.

The Royal Institution of Chartered Surveyors reported a slowdown in house price inflation in the three months to June while Nationwide said prices were down 0.2% in July.

Oil prices too have fallen from their highs earlier this year.

However, the British economy does appear to still be growing strong.

In the second quarter, GDP was up 0.9% from the previous three months.

On Wednesday, the CBI's distributive trades survey reported shop sales had picked from what had been a poor June.

But the pace of growth was still slower than it was in the spring.

Union pressure

The Bank of England also faced pressure from unions to keep rates on hold.

Industry badly needs a "stretch of stability" with interest rates on hold to help bring down the pound's value, a report from the Trades Union Congress said on Thursday.

According to the report, 95,000 jobs were lost in the year to May.

TUC deputy general secretary Brendan Barber said: "Manufacturers trying hard to stay afloat will be keen for interest rates to stay the same for another month."

"Although in the long term rates must begin to fall again, a stretch of stability is the best bet for this struggling sector," he added.