BoE to keep rates on hold to combat inflation

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LONDON, June 4 (AFP): The Bank of England (BoE) was expected to keep interest rates at 5.0 per cent today to combat inflation driven by soaring oil and food prices despite concerns over slowing growth and the housing market, analysts said.

Economists forecast that the British central bank would make no change to its key "repo" rate-at which it lends cash to commercial banks-after a two-day meeting that begins Wednesday.

"It appears to be a stone-dead certainty that interest rates will remain at 5.0 per cent even though the economy continues to weaken and house prices are currently heading south at an increasing rate," said economist Howard Archer at the Global Insight consultancy in London.

"This reflects the fact that inflation pressures and risks have increased appreciably despite the ongoing slowdown in growth."