The wise and possibly mortgage free members of The Bank of England Monetary Policy Committee has kept interest rates at 5% despite calls for a cut from most interested parties in the housing market.The majority of economists now think that interest rates will remain unchanged for several months until the Bank is confident that price pressures are easing.
Ian McCafferty, chief economic advisor at the Confederation of British Industry, said: "The Bank had little option this month other than to leave interest rates on hold - oil and commodity prices are still of greater concern and businesses are having to raise prices as profit margins get squeezed further."
To combat the decline, the OECD said the Bank of England needed to cut interest rates three times, bringing them down to 4.25% the lowest in more than four years.
The Bank's decision sent sterling sharply lower against the euro while it held its ground against the dollar. Meanwhile, government bonds dropped as the Bank held off lowering its rate.
Simon Rubinsohn, the chief economist at the Royal Institute of Chartered Surveyors, said the case is rapidly building for "the authorities to adopt a looser monetary stance in the very near future."
