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News: Bank unanimous on interest rate freeze

Minutes from the latest meeting (September 7/8th) of the Bank of England's interest rate setting committee show all 9 members in favour of keeping interest rates on hold at 4.50% this month. Yet despite the first rate cut in 2 years in August - following a 5-4 majority - there is still a lot to play for as far as homeowner hopes of a further rate reduction by the end of the year are concerned.

Whilst unlikely, the economic picture nonetheless remains cloudy - the committee, like others, trying to weigh up the implications of Hurricane Katrina for both the global and domestic economy. Also factored into its equation was the impact of rising oil prices. That said, the committee, for now, has taken the position that Katrina, at least, will have little effect, longer term, if past history is anything to go by.

But it noted that the UK economy remained sluggish for the fourth quarter in a row and that the recent increase in consumer demand had been weaker than predicted - although the latter may in part be explained by British travelers spending money abroad being under reported in the data.

While all members were agreed on the risk posed by inflation indications are that they attached different levels of importance to such risk.

Economists not surprisingly remain divided over the committee's next rate move, given its latest (and non-committal) statement. If further weakness in economic growth data and stabilisation of the inflation regime pans out then it may yet be game on for homeowners looking for slightly cheaper loans over the months ahead.

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