June 7, 2002	Friday	Rabi-ul-Awwal 25,1423

LONDON, June 6: The Bank of England held its main interest rate steady on Thursday at 4.0 per cent for the seventh month in a row, as it waited for clearer evidence that the fledgling economic recovery has taken root.

However, the British central bank’s eight-member monetary policy committee (MPC) as usual gave no explanation for its decision to hold the rate at a 38-year low point.

Meanwhile in Frankfurt the European Central Bank held its key rate at 3.25 per cent on Thursday.

In the United States the federal funds rate is at a 40-year low point of 1.75 per cent.

The decision by the Bank of England to hold its rate had been widely expected by analysts after recent data showed that the British economy had flirted with recession at the start of the year as manufacturing industry struggled to get to grips with strength of the pound and the global economic downturn.

However, with house price inflation running at breakneck pace, and the boom in British high street sales showing no sign of abating, it appears to be only a matter of time before rates start heading higher for the first time since February 2000.

The MPC slashed rates by a total of two percentage points over the course of last year as it sought to stave off the twin recessionary threats of a meltdown in global stockmarkets and the September 11, attacks.—AFP