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U.K. interest rates on hold
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September 7, 2000: 7:02 a.m. ET
Bank of England leaves key interest rate unchanged for seventh month
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LONDON (CNNfn) - The Bank of England decided on Thursday to leave U.K. interest rates unchanged at 6 percent, holding steady for the seventh straight month, as recent economic data indicated that inflationary risks in Europe's second biggest economy are diminishing.
Most economists had said they would not have been surprised by a hike in the key rate to 6.25 percent, given that the vote at last month's meeting of the Bank's Monetary Policy Committee split 5-4 in favor of holding rates, and because there were signs that the economy is still growing robustly.
"Data since the August vote has generally been a little softer than expected," economists at Chase Manhattan said in a report to clients. "But the strength in previous months means that there is still no conclusive slowdown evident in the U.K."
The Bank's quarterly inflation report, published in August, projected underlying inflation, which is currently at 2.2 percent, will bust through its 2.5 percent target in two years' time to hit 2.7 percent.
Average earnings growth has fallen to its lowest in three years, and repeated price surveys have showed inflation at record lows, amid signs that growth in consumer demand growth is moderating.
Figures released by the Confederation of British Industry on Wednesday reinforced earlier surveys, showing British retailers cutting prices at a record rate to shift goods, while manufacturing output suffered a surprise 0.3 percent fall in July. 
--from staff and wire reports
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Bank of England
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