The Bank of England has left its main interest rate unchanged at 4% for the 12th month in a row. Pressure had been mounting for it to follow the example of the US Federal Reserve which cut rates by half a point last night. Economists had increasingly expected a British rate cut following the Fed move.
Pressure on the UK manufacturing sector had already fuelled the possibility of a cut, and British industry leaders had reiterated calls for the Bank to act after figures earlier this week showed a surprise fall in manufacturing output.
In addition, consumer spending has slowed from its peak while economic growth - while rising more than expected last quarter - is still lacklustre.
Analysts say the only issue standing in the way of lower rates is fear a cut will further fuel consumer borrowing and soaring house prices.
