LONDON, Aug 2: The Bank of England left British interest rates at 5.75 per cent on Thursday as the central bank took stock of five quarter-point hikes in the last 12 months that were aimed at calming inflation.

Despite the widely-expected decision, many economists predict borrowing costs could hit 6.00 per cent in the coming months due to stubbornly high inflation driven by faster-than-expected economic growth.

The BoE’s Monetary Policy Committee (MPC) gave no reasons behind its latest decision on Thursday, as is traditional when no change is made to the “repo” rate -- at which the central bank lends to commercial banks.

“We think this marks a period of reflection for the committee to assess the impact of monetary tightening to date,” said Investec economist David Page.

The BoE has hiked rates five times since August 2006 to 5.75 per cent -- the highest level since the start of 2001 -- as it has sought a handle on rising inflation.

Global Insight economist Howard Archer added: “If interest rates of 6.00 per cent are to be avoided, we suspect that the MPC will quickly need to see sustained, strong evidence that growth is moderating and that underlying inflationary pressures are easing.”

But Britain’s economic growth picked up in the second quarter of 2007, expanding by 0.8 per cent, compared with 0.7 per cent during the first quarter, according to official data.

Many analysts are forecasting slower expansion later this year owing to the impact of recent hikes.

For clues on the next step for interest rates, experts must wait until next Wednesday, when the BoE will publish its quarterly forecasts for inflation and growth.—AFP