Bank of England maintains base rate

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The base rate of interest is to remain at 5.75 per cent following this months meeting of the Bank of Englands monetary policy committee (MPC).

October is the third month in a row in which the MPC has opted to fix the rate following a 0.25 per cent increase in July.

And despite the recent credit crunch, one analyst predicts that rates are unlikely to drop in the run-up to Christmas.

Howard Archer, chief UK and European economist at Global Insight, asserts that any such move could be premature.

"We certainly would not rule out a 25 basis point interest rate cut to 5.5 per cent in November," Mr Archer comments.

"For now though, we believe that interest rates are more likely to be trimmed twice in the first half of 2008."

He concludes that a pre-Christmas cut would only be seen as necessary if inflationary pressures continue to be diluted by the fallout from the credit crunch.

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