The Bank of England is poised to leave interest rates on hold at 4% tomorrow after a Christmas retail boom and renewed signs of strength in the housing sector, economists forecast.
After lowering interest rates seven times by a cumulative two percentage points last year, the Bank of England's monetary policy committee may now have used up all its monetary ammunition, analysts said.
Bank of England governor Eddie George first hinted as much last week when he warned that rates might have to be hiked to moderate racing consumer demand.
Recent surveys revealed that British retailers enjoyed their best Christmas for years, easing concerns that the economic slowdown in Britain could worsen.
Snapshots of the housing market - a closely watched economic indicator - showed that house prices soared last year. Against such a backdrop, some investors are turning their thoughts to the possibility of interest rate rises.
