Interest rates left unchanged at 4.5%

Despite pressure to lower interest rates, the Bank of England has left them
unchanged for the sixth month running. The Bank’s Monetary Policy Committee has
not changed the rate since August last year.

Some analysts are predicting the 4.5% rate will remain unchanged for the
entire year as economic growth comes back towards the trend rate, The

Other factors in the decision not to drop the rate was the modest improvement
in growth in the fourth quarter of 2005 and the fact that earnings data from the
all-important January pay round is not available until March.

Kevin Hawkins, the director-general of the British Retail Consortium, said:
‘After the pre-Christmas upturn, we are now back to the reality of a tough,
discount-driven retail market. The message from every sector of our industry is
the same. The squeeze on consumer spending continues unabated. The economy badly
needs a cut in interest rates.’

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