The Bank of England (BoE) has kept British interest rates unchanged today, defying manufacturers' calls for a cut and disappointing consumers paying off record levels of debt.
A poll published last week of 29 economists found all forecast rates would stay at 5 per cent, although many have pencilled in a further cut by the end of the year.
Britain's rates are still the highest among the Group of Seven (G7) leading industrialised nations and are well above US rates of 3.5 per cent and the euro zone's 4.25 per cent level.
The BoE cut rates a quarter of a point last month - the fourth reduction this year - to help insulate the British economy from recessionary forces stalking the global economy.
But although the bank's respected governor, Sir Eddie George, voted for a cut, his deputy governors Mr Mervyn King and Mr David Clementi voted against the move. The rate-cutters won the crucial vote six to three.
But a spate of economic data published this week backs economists' conviction the Bank of England will not cut rates this week, for fear of stirring inflation.
Core inflation minus the cost of home loans is just 2.2 per cent, below a government-set 2.5 per cent target, but past rate cuts are still stimulating the economy.
"It seems unlikely the Bank will cut rates again at least until the MPC [the BoE's Monetary Policy Committee] receives convincing evidence that their expectation of a slowdown in consumer demand is actually starting to emerge," said Mr George Buckley of Deutsche Bank.