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Last Updated: Thursday, 4 May 2006, 09:20 GMT 10:20 UK
Bank set to keep UK rates at 4.5%
Bank of England
Rates are set to be frozen again
UK interest rates are expected to remain at 4.5% for the ninth month in a row following the latest meeting of the Bank of England.

Many analysts now expect rates to remain at 4.5% for the rest of 2006, with some suggesting the next move could be up rather than down.

Recent data has indicated that the manufacturing sector is showing signs of recovery.

The Bank will also be keeping an eye on rising house prices and energy costs.

Rate debate

The latest meeting of the Bank's Monetary Policy Committee (MPC) will be the last one that MPC member Stephen Nickell will attend.

He has voted for a rate cut at the past five meetings.

"His (Mr Nickell's) departure will tend to reinforce the probability of base rates remaining at 4.5% for some time," said Ross Walker, UK economist at RBS.

However, the debate among some analysts has now shifted to whether there could be a rate rise on the cards.

Recent government data and a survey from the Chartered Institute of Purchasing and Supply (CIPS) have suggested that the manufacturing sector is recovering.

Recent property surveys have also seen a pick-up in property prices, and the continued strength of oil prices is also raising inflation fears.




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