THE Bank of England maintained the cost of borrowing at 3.5 per cent for the second consecutive month yesterday, after recent data showed signs of a recovery in the UK's economy.
In a widely-expected decision, the Bank's Monetary Policy Committee (MPC) chose to delay any further action on interest rates.
The UK economy has shown signs of shrugging off its recent sluggishness, with strong indications of revival in the manufacturing sector and improvements in service industries coinciding with record mortgage lending.
Led by bank governor Mervyn King, policymakers have been torn between tackling soaring consumer debt and trying to bolster flagging manufacturing firms.
British consumers have also been borrowing at record levels as 48-year-low interest rates encourage them to spend more.
John Butler, economist at HSBC, said rates were likely to remain on hold for the rest of the year.
He said: "A hike would be a huge shock that would risk triggering a consumer downturn and leave the Bank of England open to criticism."
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