'Softer patch' sees Bank hold rates

'Softer patch' sees Bank hold rates

Thursday, November 04, 2004

A softer patch in the economy and tumbling house prices are some of the consideration that led to the Bank of England's Monetary Policy Committee leaving interest rates on hold at 4.75% this morning.

Last month, Bank of England governor Mervyn King said that the economy had hit a "softer patch" after rapid economic growth in the first half of 2004, Since then house price statistics including Nationwide's have indicated house prices have started to tumble, confirming that interest rates were biting, say lenders.

In a separate report by the Bank of England mortgage approvals were shown to have fallen to a four year low, with the number of people taking out loans falling to just 89,000 in September.

The most recent change in interest rates was an increase of 0.25 percentage points to 4.75% in August.

Economists warn against thinking that rates have peaked however. Richard Jeffrey, chief economist at Bridgewell Securities, told BBC Radio 4's Today programme: "I still think interest rates are going up …we are not out of the woods."

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