The decision by the Bank's Monetary Policy Committee to leave the cost of borrowing at 5.75pc was predicted by all but one of the 60 economists surveyed by financial news agency Bloomberg.

Governor Mervyn King has come under heavy fire for his handling of last month's Northern Rock crisis, which has dented consumer confidence and called into doubt the Bank's earlier projection that rates would need to rise to 6pc.

While the members of the MPC are taking more time to examine the impact of the financial turmoil on the rest of the economy, housing data today from the Halifax suggests the market is slowing. Prices dropped 0.6pc last month, the first decline this year as both buyers and sellers stood back from the market.

The Bank had indicated in its quarterly Inflation Report in August that rates might have to rise keep inflation on track, but since then the CPI has dropped and the economy has been beset by profound threats.

Today's decision to leave rate on hold will come as a disappointment to the British Retail Consortium. Kevin Hawkins, its director general, yesterday called for the bank to take immediate action on rates.

The plea from the country's retailers comes after a warning from the Ernst & Young Item Club over the weekend that a cut would be the smartest move for the economy and the struggling financial services sector.

Source: The Telegraph

Pending sales of US homes fell to a record low in August as would-be homebuyers had difficulty obtaining mortgages from cautious lenders. The National Association of Realtors said its index of pending sales fell 6.5% in August to 85.5.

This was the lowest reading since records began in January ...   more »