Reply #44: Bank of England Holds Rates Steady [View All]

[citizen snips]

LONDON (AP) -- The Bank of England held its key interest rate steady at a six-year high of 5.5 percent on Thursday, following reports that price inflation is slowing in the services sector and that house price growth may be easing.

The bank last raised rates last month after three other rises since August apparently failed to cool inflationary pressures and a buoyant housing market. Even after the European Central Bank raised rates Wednesday by a quarter point to 4 percent, Britain remains atop of the interest rate table of the world's seven wealthiest nations.

Most economists even expect another quarter of a percentage point rise next month as the Bank of England tries to bring Consumer Price Index inflation back to its 2 percent target from its current level of 2.8 percent.

"It remains highly likely that interest rates will rise to 5.75 percent sooner rather than later, and we continue to favor a move in July," said Global Insight's chief U.K. economist Howard Archer.

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