The Bank of England's Monetary Policy committee has announced it is keeping interest rates unchanged...
The Bank of England's Monetary Policy committee has announced it is keeping interest rates unchanged at 4% despite last night's decision by the US Federal Reserve Bank to cut rates there by 0.5% in the face of poor economic performance.
The decision will be disappointing for some investors, who had hoped for another round of global monetary easing - the European Central Bank has yet to announce its rate decision.
The FTSE 100 index was up about 1%, or 41 points just before the decision was announced.
However, it fell back to a 0.5% or 24 points gain on the opening by trading at 4,127 just a couple of minutes after the BoE made its announcement.
Once again it is the question of house prices that economists say has stayed the bank's hand, coupled with figures indicating improving GDP growth during the third quarter.
Retailers such as Marks & Spencer have warned that earnings growth may be patchy over the next year, but retail sales in October were still surprisingly strong.
The Bank may yet decide to lower rates.
A survey by Experian Business Strategies, part of London listed GUS, says up to 250,000 UK jobs could be lost if war with Iraq breaks out and forces oil prices up to more than $40 per barrel.
And slow growth in the US could already be hitting UK exports, threatening the pace of British economic recovery.
The minutes of today's MPC meeting are due for release on 20 November, when it will become clearer how many members voted to keep rates unchanged.
The 4% rate has remained unchanged for a year, but last month 3 members voted for a cut to stave off weaker economic growth prospects.
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