Bank set to keep rates on hold

THE Bank of England is expected to leave interest rates on hold at 4.75% on Thursday as a growing body of evidence points to the fact that it has got the housing market and Britain's retail excesses under control.

Not one economist in a recent survey of 50 City soothsayers was betting on a hike in loan rates.

Data from mortgage bank Halifax last week showed the rising cost of borrowing has put the brakes on runaway house prices, while a rain-sodden August has cooled High Street spending.

British Retail Consortium figures later today will show last month's like-for-like shop sales were almost static year on year and were down 1.8% from July.

While the BoE has hit the target with five rate rises in ten months, Britain's manufacturing and service sectors have been injured in the process.

According to BDO Stoy Hayward, business output has fallen to its lowest in a year thanks to a drop off in consumption prompted by rising rates.

The accountant's output index - a 'poll of polls' of recent economic data - fell 0.3 points to 101.5 in August.

Longer term, companies remain optimistic, BDO said.