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Bank leaves rates unchanged
The Bank of England has announced that interest rates are to remain unchanged for at least the next month.
Despite the upward pressure on rates - allied with fears of a house price crash - the monetary policy committee left rates unchanged at 4.5 per cent.
The decision follows two successive rate rises and growing speculation of further increases.
The announcement was welcomed by British business.
David Frost, director general of the British Chambers of Commerce, said: "After consecutive monthly rises in May and June it would have been premature to put rates up again so soon.
"The Bank is right to pause and take stock of the economy ahead of its inflation report next month.
"We are concerned that the increasing focus on house prices in the Bank's deliberations will be to the detriment of Britain's all-important productive sector.
"A big question mark hangs over the strength of the manufacturing recovery.
"We accept that moderate interest rate rises may be needed later in the year, but we urge the MPC to proceed with caution - the modest upturn in manufacturing is vulnerable and it cannot become the justification for rapid rate rises."
The TUC said that any rate rise would have been "premature".
"Furthermore, Britain's manufacturing sector needs a period of interest rate stability if we are to see the investment-led recovery needed to put us on a par with our competitors," said chief economist Ian Brinkley.
"The sector could do without the threat of a rise in August."
And the CBI also said the decision was the right one.
"Business needs a breathing space to allow the impact of the last increases to take effect," said chief economic adviser Ian McCafferty.
"There are now early signs that the recent very rapid pace of increase in house prices and consumer spending is beginning to moderate.
"So far there are few signs of inflation pressures that could seriously threaten the Bank of England's target. Rates are likely to have to edge up further later in the year, but for now the Bank need be in no hurry."
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