The Bank of England has decided to hold interest rates at 4.75 per cent.

The move meets expectations of City analysts, after five rate rises since last November. 

But quarterly forecasts published last month suggested that another quarter-point increase could ensure that the monetary policy committee remains within its two per cent inflation target.

Nevertheless, analysts are divided between those who believe interest rates will now remain at 4.75 per cent until the end of the year, and those who think an increase is on the cards for November.

Thursday's decision was welcomed by the TUC.

"Manufacturers struggling to compete and employees paying mortgages will be relieved," said chief economist Ian Brinkley.

"But UK industry needs the reassurance of a sustained period of interest rate stability to instil the confidence to invest and grow."

Business leaders were also pleased with the result.

"The Bank has made the best decision for business today," said David Frost, director general of the British Chambers of Commerce.

"There is growing evidence that the housing market is cooling down, suggesting that earlier rises in interest rates appear to be running their course.

"The fact the financial markets now expect rates to peak at a lower level than before demonstrates the MPC's good sense in waiting to judge the effects of earlier rises."