Economists predict interest rate hold

Financial markets experts forecast that the Bank of England's monetary policy committee (MPC) will opt to keep the base rate on hold at its two-day meeting next month.

A total of nine out of nine economists and financial institutions polled this week suggested that there would be no change in interest rates at the monthly meeting on July 10th.

Interest rates remained on hold at five per cent last month and, with rising inflation and energy prices coupled with slowing economic and housing market growth, experts are predicting a further decision to wait and see.

Simon Hayes, senior UK economist at Barclay's Capital, explained: "They've (the MPC) been caught between two posts … caught between those two risks, I think they are going to stay put."

According to Richard Snook, economist at the Centre for Economic and Business Research, "there is very little that the bank can do now that is going to set the bar to inflation over the next six months".

Ross Walker of the Royal Bank of Scotland went a step further and forecasted that the Bank of England would exercise caution and hold rates at five per cent for the rest of the year.

Meanwhile, the euro is trading at near record highs and the European Central Bank opted to raise interest rates within the eurozone by a quarter point to 4.25 per cent, the highest level since 2001.