Interest rates

The Bank of England's monetary policy committee has voted to keep interest rates at 4.75 per cent.

The most recent change in interest rates was a quarter point increase on August 5, 2004.

Stakeholder comment: Institute of Directors

Graeme Leach, IoD chief economist, said: "The key question is whether the softening in economic activity now underway, is sufficient to trigger a reduction in interest rates over the summer.

"Our view is that interest rates will stay at 4.75 per cent at least until the autumn.

"There is a broad based slowdown underway - across both manufacturing and service sectors - but it is still too early to gauge how far and how deep this is.

"We expect to see interest rates unchanged in July and August, but thereafter, the probability of a quarter point cut is increasing."

Stakeholder comment: British Retail Consortium

Kevin Hawkins, BRC director general, said: "The BRC is naturally disappointed with the Bank of England's failure to reduce the interest rate by the modest 0.25 per cent we have advocated, but we are not surprised at the decision.

"We urge the MPC to keep all the main indicators of economic activity under close review over the next few weeks as the downside arising from the weakness in consumer spending is growing week by week and will spread to currently unaffected parts of the economy."