The Bank of England has left interest rates unchanged at five per cent despite calls for a cut to save jobs in the manufacturing sector.

Data showing strong consumer spending, rising house prices and evidence of an economic recovery in the US led to the committee concluding that "no change" was needed at this stage.

The bank's committee of "wise men" voted for a quarter point cut last month and many expect rates to fall further over the coming 18 months.

The decision came as business and manufacturing intensify called for further rate reductions amid gloomy prospects for jobs within the sector.

TUC General Secretary, John Monks, expressed dismay at the decision.

"Today's decision is disappointing, especially in light of the latest plunge in manufacturing output. The Bank must consider further cuts to sustain economic growth and the viability of our manufacturing base. Inflationary trends are muted and provide plenty of scope for the Bank to cut again in the coming months if things do not pick up," he said.

This week has seen the announcement of a series of job losses - particularly in the hi-tech electronics sector.

Evidence published on Thursday showed that manufacturing output dropped by 0.9 per cent in July - standing three per cent down since last year.

The sector is now seeing its worst annual performance since January 1992. Industrial production, including mining and energy production, is also at a 10-year low.

FTSE has also given grounds for pessimism, falling to a three-year low on Wednesday.

Matthew Taylor, the Liberal Democrat's shadow chancellor, believed the decision did nothing to help exporters.

"The Bank of England is clearly trying to address the problem of the increasingly two-speed British economy. While this may be the right decision for the economy as a whole, it does nothing to help exporters. The Bank can't be expected to tackle the problem of the overvaluation of sterling on its own. This decision now increases the pressure on the chancellor to take decisive action on the exchange rate," he said.