Interest rates held at 5.75%

The Bank of England has voted to hold interest rates at the current level of 5.75%.

The Monetary Policy Committee, which sets interest rates, decided to leave rates unchanged. Unusually, it then released a statement revealing the decision.

Statements are usually only released by the Monetary Policy Committee to accompany a change in interest rates.

Just a few months ago, many economists were predicting that interest rates would hit 6% before the end of 2007. Given the current problems in the financial market, this now seems unlikely.

The statement from the Monetary Policy Committee said: "It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households."

Problems in the financial markets were sparked by the crisis in the US sub-prime mortgage sector.

As sub-prime mortgages are offered to people with poor credit ratings or low incomes, high US interest rates have caused record levels of mortgage defaults.

While the Bank of England’s decision has been welcomed, many financial experts believe they could be doing more.

David Kern, economic adviser at the British Chamber of Commerce, said: "Simply keeping rates on hold today is not enough, if the decision is interpreted as a mere short-lived postponement.

"The MPC must acknowledge that further interest rate increases should now be off the agenda."

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