European and English rates left unchanged

Both the Bank of England and European Central Bank have decided to leave
interest rates unchanged.

The Bank kept UK interest rates at 4.5% for the 11th consecutive month while
the European Central Bank (ECB) left its main interest rate unchanged at 2.75%.

UK economists still think there could be a hike before the end of the year
although last week Bank’s governor, Mervyn King, suggested he was in no rush to
change rates because of weakness in the stock market and with the strength of
the pound easing inflationary fears.

The ECB’s decision followed a quarter-point rise in the cost of borrowing at
its last rate-setting meeting in June.

Economists though feel the rate could rise to 3.25% by the end of 2006.

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