The Bank of England’s Monetary Policy Committee (MPC) has decided to keep the base rate of interest unchanged at 4.5%. This news has not been taken positively by the business community. Manufacturers are disappointed by the MPC’s decision to keep the interest rates unchanged.

According to economists, a rate cut could be a boost for the British economy which is showing signs of sluggishness. Some economists believe that the interest rates might be reduced later this year. It is possible that the Bank of England is waiting for a change in the inflation and economic growth forecasts.

Meanwhile, the CPI inflation in the UK in January 2006 was 1.9%. The RPI inflation was 2.4% in the same month. It was 0.2% more than the inflation in December 2005. There has been a rise in the fuel prices. The cost of telephone calls from landlines has also increased. The costs of food, clothing, footwear, and furniture, on the other hand, showed a decline.

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