MANUFACTURERS breathed a sigh of relief yesterday as the Bank of England kept interest rates on hold for the third month in succession.

The Bank's monetary policy committee (MPC) decided to keep rates at 4.75 per cent - a move widely expected by the City amid signs that the economy was slowing down.

Inflation is at its lowest level since March and the property boom appears to have stalled in the wake of five rate rises since last November.

Alan Hall, Northern director of The Engineering Employers Federation (EEF), said: "Companies in the region will be relieved that the MPC has left interest rates on hold.

"From a manufacturing standpoint, there should be no further increases this side of Christmas and the bank needs to think carefully before any upward movement in the New Year.

"This would give business some breathing space in the face of escalating costs and until the extent of any slowdown becomes clearer.

"The EEF would like to see interest rates left on hold and for the next move to be downwards."

According to the latest quarterly economic survey by the British Chambers of Commerce (BCC), business confidence is in decline.

BCC director general David Frost said: "The bank must continue to take a cautious approach in the months ahead. We cannot rule out the possibility that interest rates have peaked."

The Nationwide Building Society said property prices fell for the first time in three years when they eased 0.4 per cent last month, while the Halifax yesterday recorded a faster rate of decline of 1.1 per cent.