January 10, 2003	Friday	Ziqa’ad 6, 1423

LONDON, Jan 9: Bank of England policymakers voted on Thursday to hold the central bank’s main interest rate steady at 4.0 per cent for the 14th month in a row, despite recent signs that the economic recovery is faltering.

The central bank’s nine-member monetary policy commitee (MPC) gave no explanation for their decision to leave rates at the lowest level for almost 40 years, though it had been widely expected by economists here.

The British central bank slashed interest rates in 2001 in response to a global economic slowdown exacerbated by the September 11 terror attacks.

But the central bank has been reluctant to cut interest rates any further, despite calls from struggling manufacturers, for fear of stoking up a consumer spending and house price boom that could turn to bust if rates need to go up.

Audrey Childe-Freeman, economist at Canadian Imperial Bank of Commerce, said the Bank of England’s decision appeared justified by recent international and domestic news.—AFP

ECB: The European Central Bank (ECB) held its key interest rates steady at its first policy-setting meeting of the new year on Thursday and seemed intent on dampening speculation it might cut them again in the near future.

The guardian of the euro announced at its regular monthly policy-setting meeting that it was leaving its central “refi” refinancing rate unchanged at 2.75 per cent.

And it also held its other two key rates — the deposit rate and the marginal lending rate — steady at 1.75 per cent and 3.75 per cent respectively.

No rate changes had been expected this week.—AFP