For the 10th consecutive month, the Bank of England has left interest rates unchanged at 4.5%.
Crispin Finn, UK equities portfolio manager at Credit Suisse, said: “The widely anticipated announcement followed the release of recent economic data that highlighted the growing strength of the UK economy. "An industry report showed that retail sales in the UK had risen for the second consecutive month in May. Also in May, the Chartered Institute of Purchasing and Supply Index recorded a higher than expected expansion in the UK services sector, although the Index fell from April’s 27 month high.
“As exports again strengthened in May, the manufacturing industry expanded for the 10th consecutive month as data showed that industrial production expanded at the fastest pace in a year in the first quarter of 2006.
“Nevertheless, any growth in retail sales is likely to be uneven, given record levels of consumer debt, higher utility bills and some uncertainty over job security. Interestingly, the data suggests that UK economic growth is now beginning to shift away from being largely consumer driven, to one that is broader based, with significant contributions from both manufacturing and service industries."
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