Interest rates on hold

Both the Bank of England and the European Central Bank (ECB) have kept interest rates unchanged. UK rates remained at 5.5% in what was described as a tough decision as the MPC had to balance signs of a slowdown in consumer spending against growing inflationary pressures. There is considerable belief that there will be further rate cut in February. Rates in the Eurozone remained at 4% where high oil prices and an increase in the cost of food have buoyed inflation at a time when economic growth is seen slowing. The threat of increasing inflation is likely to stave off any cut in eurozone rates in the near future.