Rate holds at 5%


The interest rate will remain at five per cent, the Bank of England has announced.

Its monetary policy committee has decided against an increase amid swathing job cuts and fears of rising inflation.

The freeze was to be expected, according to nine chief economists polled before today’s announcement.

They were unanimous with their predictions. Only the Nationwide’s spokesperson felt there was any need to consider otherwise, saying it was "eighty per cent swaying towards no change and 20 per cent for a 0.25 base point hike".

Representatives of Lloyds TSB, Capital Economics, RBS, HSBC, Halifax, CEBR and Barclays Capital all expected rates to hold.

Howard Archer, managing director of Western European Forecasting and Analysis at Global Insight, said a freeze at five per cent "could well mask a three-way split in the vote and the future path of interest rates is currently highly uncertain".

Commercial property markets are directly affected by interest rate decisions – they rely on developers’ ability to borrow money and companies demand for new offices in London.