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Last Updated: Wednesday, 22 March 2006, 11:57 GMT
Bank voted 8-1 to hold UK rates
Bank of England
Analysts do not expect an interest hike any time soon
The Bank of England's interest rate setting committee voted overwhelmingly to freeze rates for the fourth month running, meeting minutes reveal.

A stronger housing market tempered by lower consumer spending prompted the decision to keep rates unchanged.

Eight of the Bank's Monetary Policy Committee (MCP) voted to freeze the 4.5% rate, against only one in favour.

Stephen Nickell was once again the only MPC member to vote for reducing rates to 4.25%.

Mr Nickell believed the bank's forecast for output in February was overly optimistic.

Analysts were not surprised by the decision and do not expect a rise any time soon.

Fence sitting

Alan Clarke, an analyst with BNP Paribas, said the MCP minutes for March were a case of "fence sitting at its finest".

The MCP said indicators suggested that gross domestic product for the first three months of the year was increasing above its long-term potential, with business services notably strong.

Committee members said the slightly stronger housing market was being tempered by lower consumer spending, due in part to higher taxes and higher gas prices.

Several utility companies have recently increased prices by more than 20%.

Analyst Rob Carnell from ING said: "We, however, continue to view the recent upturn in housing as a temporary phenomenon."

"With housing unlikely to provide an offset to the other disinflationary influences over the course of the year, we continue to regard the most probable next direction for UK rates as down, not up," said Mr Carnell.

UK interest rates unchanged again
09 Mar 06 |  Business
Interest rates 'to stay on hold'
09 Mar 06 |  Business

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