This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6528175.stm

The article has changed 3 times. There is an RSS feed of changes available.

Version 1 Version 2
UK rates tipped to stay at 5.25% Rate decision seen as close call
(1 day later)
The Bank of England's Monetary Policy Committee is expected to keep interest rates at 5.25%. The latest interest rate decision by the Bank of England is being seen as a tough call, but most analysts expect rates to stay at 5.25%.
But if rates do not go up on Thursday, they could rise soon after - possibly as early as May, when inflation figures are released, say economists. However, even if the Bank does not put rates up this month, many predict rates will still rise to 5.5% in May.
Data showing March retail sales rose at their fastest rate in more than two years could boost the chance of a rise. Recent economic data has shown UK inflation edging up and retail sales still growing strongly.
The UK has raised rates by a quarter point three times since last summer: in August, November and January. The UK has raised rates by a quarter point three times since last summer - in August, November and January.
'Uncertainty''Uncertainty'
"Although the risk of an early move this Thursday is serious, the Bank of England is a bit more likely to wait until May," said Holger Schmieding, an economist at Bank of America."Although the risk of an early move this Thursday is serious, the Bank of England is a bit more likely to wait until May," said Holger Schmieding, an economist at Bank of America.
This view was echoed by Philip Shaw, chief economist at Investec Securities: "We are still forecasting a 25 basis point increase to 5.5% in May".This view was echoed by Philip Shaw, chief economist at Investec Securities: "We are still forecasting a 25 basis point increase to 5.5% in May".
"Our central view remains that rates will come down gently in 2008," he added."Our central view remains that rates will come down gently in 2008," he added.
In March, members of the Monetary Policy Committee (MCP) voted 8 to1 to keep rates on hold, minutes show. In March, members of the Bank's Monetary Policy Committee (MPC) voted 8 to1 to keep rates on hold, minutes from the meeting showed, with David Blanchflower voting in favour of a rate cut.
Only David Blanchflower voted in favour of a rate cut. However, the last vote came against a backdrop of wildly fluctuating stockmarkets worldwide, which raised concerns over the possibility of wider economic contraction.
The last vote came against a backdrop of wildly fluctuating stockmarkets worldwide, which raised concerns over the possibility of wider economic contraction.
While the markets now appear far less volatile, Mervyn King, the Bank of England's governor, has suggested such instability could occur again, as worries over the US economy remain.While the markets now appear far less volatile, Mervyn King, the Bank of England's governor, has suggested such instability could occur again, as worries over the US economy remain.
The drop in inflation in January - to 2.7% from 3% - was seen as a key factor in keeping rates unchanged. The drop in CPI inflation in January - to 2.7% from 3% - was seen as a key factor in keeping rates unchanged in March.
However, the following month saw inflation hit 2.8%, a figure above target. However, the following month saw inflation edge up to 2.8%, a figure well above the government's 2% target.
Mr Shaw said: "The rule of thumb when uncertainty reigns tends to be that the MPC places greater reliance on its inflation report analysis. This implies no change this time but a hike next month."Mr Shaw said: "The rule of thumb when uncertainty reigns tends to be that the MPC places greater reliance on its inflation report analysis. This implies no change this time but a hike next month."
As well as strong retail in March, other figures for the month showed annual house price inflation across the UK hit nearly 10%, according to the Nationwide Building Society. As well as strong retail figures in March, other data for the month showed annual house price inflation across the UK hit nearly 10%, according to the Nationwide Building Society.