The Bank of England kept interest rates at 4.75 per cent for the eighth month running, but many economists expect another rise once the May 5th general election is out of the way.

The decision follows recent reports suggesting that typically free-spending British consumers are feeling the pinch from five rate hikes in one and a half years and a slowing housing market.

Data out shortly before the Monetary Policy Committee's decision also underlined the fragility of the British manufacturing recovery. Output fell for the first time in six months in February.

But economists said the bank might still raise borrowing costs at either its May or June meetings to ensure that inflation does not rise above its 2.0 per cent target as the overall economy keeps growing strongly. Two MPC members had already voted for a hike in February.

"We still think a quarter point rise will come by June," said Graeme Leach, chief economist at the Institute of Directors. "But the situation is uncertain and when taken together with the general election campaign, (it) probably nudged the MPC towards leaving interest rates on hold.

The MPC decides rates free from government influence but is keen to avoid any accusation of political bias. It has rescheduled next month's rate announcement from election day to May 9th.