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U.K. holds interest rates
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March 9, 2000: 7:15 a.m. ET
Bank of England keeps key rate at 6% as strong pounds curbs growth
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LONDON (CNNfn) - The Bank of England held the U.K.'s key interest rate at 6 percent Thursday, as expected, signaling its belief that earlier rate rises have damped much of Britain's inflationary growth pressures.
The decision follows two hikes this year by the Bank's Monetary Policy Committee (MPC) and two in the last quarter of 1999, as a combination of annualized economic growth running at 3 percent and rising wages and housing costs have threatened the bank's inflation target.
However, weak domestic manufacturing and industrial production data released on Wednesday bolstered expectations that the MPC would keep rates unchanged, said analysts. While house prices continue to surge, the pace of price increases has slowed.
The pound was unmoved at $1.5796 following Thursday's decision. The strength of the currency in recent months, buoyed by the earlier rate rises, had started to bite into the U.K. manufacturing sector. Output fell 0.4 percent in January, its worst performance in 18 months. The pound has fallen almost 2 percent against the dollar since the last rate rise on Feb. 10.
Analysts still expect the MPC to raise rates further this year in line with the efforts of other central banks to stifle inflationary pressures that stem in part from rising commodity prices and the continuing strength of the U.S. economy.
The European Central Bank raised its key interest rate for the 11-nation euro-currency zone to 3.25 percent on Feb. 2, a day after the U.S. Federal Reserve added a quarter percentage point to U.S. rates. The Fed is widely expected to raise rates again at its meeting on Mar. 25. 
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