Bank set to leave rates at 4.75%

The Bank of England looks poised to leave interest rates on hold at 4.75% for the eighth month in a row at the end of its two-day meeting later.

The Bank's Monetary Policy Committee (MPC) is expected to take no action in its last meeting before the election.

Softer consumer spending and a stable housing market should be enough to keep rates down in April, economists say.

However, experts are divided on whether the cost of borrowing will rise later this year.

Last month, the Bank voted by 7-2 to keep rates on hold.

Two members of the Bank's Monetary Policy Committee (MPC) - Andrew Large and Paul Tucker - voted to lift rates on the grounds that a pre-emptive tightening would ward off any inflationary threat.

The MPC minutes of last month said the balance of inflationary risks to the inflation forecast remained sufficiently to the downside in the near-term to avoid an immediate rate increase.

Mixed picture

This month inflation and consumer spending appear to be under control, although there are conflicting reports on the state of the housing market.

The data has been sufficiently mixed for the MPC to quite comfortably make the case to keep the rates unchanged Steven Pearson, HBOS

The CBI reported that UK retail sales fell at their fastest pace for six months in March.

Meanwhile, in February UK inflation remained at 1.6% for the third month in a row.

On the housing front, recent figures from the Nationwide - Britain's largest building society - showed the biggest monthly drop in prices for 10 years during March.

However, rival mortgage lender Halifax reported that house prices actually inched up 0.5% during the month.

And while separate data from the Bank of England showed a fall in the number of people applying for home loans, a survey by property website Hometrack noted an increase in the number of buyers which helped to boost the number of agreed home sales.

"The data has been sufficiently mixed for the MPC to quite comfortably make the case to keep rates unchanged," HBOS economist Steven Pearson said.