MPC holds back until polls shut

A CRITICAL meeting to decide a possible rise in interest rates will begin within hours of the polling booths closing after Thursday's General Election.

In an unprecedented move, the Bank of England's Monetary Policy Committee will meet on Friday, take the weekend off and reconvene the following Monday to decide whether to push up borrowing costs from 4.75% to 5%.

The committee has never before spread its meeting over a weekend, but Governor Mervyn King decided last year that if the General Election fell on May 5, the meeting would be shifted from Wednesday and Thursday to Friday and Monday.

Analysts believe that any judgment will be finely balanced. On the one hand, a continuing surge in consumer credit and average earnings would suggest rates ought to climb. On the other, a rise in unemployment and weaker retail sales point to a cooling in economic activity.

The City is banking on rates staying unchanged into the summer.