Bank set to leave rates on hold

UK interest rates are set to remain on hold at 4.75% following the latest meeting of the Bank of England.

The Bank's rate-setting committee has put up rates five times in the past year but rates have been on hold since September amid signs of a slowdown. Economic growth slowed in the previous quarter, as manufacturing output fell, while consumer confidence has slipped. There is also growing evidence that the previously booming UK housing market is now cooling.

House prices fell 0.4% in October, according to the Nationwide, their biggest monthly fall since February 2001. Last month, Bank of England governor Mervyn King said that the economy had hit a "softer patch" after rapid economic growth in the first half of 2004. Richard Jeffrey, chief economist at Bridgewell Securities, said it was very unlikely that the Bank of England would put rates up again this time around. "There have been sufficient signs in the economy of a slowdown to stay the Bank of England's hand," he told BBC Radio 4's Today programme. However, Mr Jeffrey said he believed the slowdown in economic activity was temporary and it was dangerous to assume that rates had peaked. "I still think interest rates are going up," he said. "We are not out of the woods."