BoE to hold interest rates amid credit woes

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LONDON, Sept 5 (AFP): The Bank of England (BoE) is expected Thursday to leave British interest rates at 5.75 per cent, according to economists.
"The ongoing problems and uncertainties in credit and financial markets substantially boost the case for the BoE to sit tight," Global Insight analyst Howard Archer noted ahead of a two-day meeting of the BoE's Monetary Policy Committee (MPC) starting today.
Global markets weakened substantially last month as US borrowers with shaky credit histories defaulted on subprime home loans, raising fears of a liquidity shortage as investors covered losses.
"The current market volatility bolsters the case for unchanged rates" Thursday, said Philip Shaw, an economist at Investec. At 5.75 per cent, the BoE's key rate is at the highest level since March, 2001.
Normally when the BoE makes no change to its key interest rate, its nine policymakers do not immediately issue a statement outlining reasons for its decision.
But owing to the recent market turmoil, some analysts believe the central bank could change track for the first time in more than eight years Thursday.