THE Bank of England's Monetary Policy Committee left base rates on hold at 7.25% at its monthly meeting yesterday.
Most of the economic data over the past month have posed little inflationary pressure and shown manufacturing industry on the rack. Even the powerhouses of the economy - consumer spending and the services industry - although still buoyant, are seeing signs of a slowdown.
The Confederation of British Industry's Distributive Trades
Survey for April, out yesterday, did show a rebound after the marked slowdown in volumes
registered in March.
Sales volumes are expected to increase a little more quickly in the year to May, though growth expectations are less buoyant than at the beginning of this year. And for the second successive survey business is regarded as below average for the time of year and by the greatest extent since November 1995.
In April, 48% of retailers reported increased sales volumes compared with the same time a year ago, while 22% said they were down, leaving a positive balance of 26% registering growth.
This figure compares with 14% who reported growth in March and 33% in February. The three-monthly average suggests that the growth in underlying sales volumes has eased a little further.
Off-licences and clothing stores reported the strongest growth while footwear and leather was the only sector to see a downturn in sales compared with a year ago. The official retail figures for April are due on Thursday, May 21.
Meanwhile, the decision by the MPC to leave interest rates alone was greeted with approval by industry leaders.
Alan Wilson, chief executive of Scottish Council Development and Industry (SCDI), said: ''Interest rates have now been held steady at their level for six months and I welcome this policy stance. The balance of economic data would seem to indicate that the economy is slowing sufficiently and 7.25% should represent the peak for rates.''
Next week sees the Bank of England inflation report and Goldman Sachs' David Walton said this ''may have a fairly dovish tone if, as we expect, the data published in the past month shifted the remaining hawks on the MPC back to neutral''.
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