The monetary policy committee (MPC) has voted to keep interest rates at 5.75 per cent.

The Bank of England unit said that it had come to its decision after its August inflation report indicated that inflation was likely to stay around its two per cent target over the coming months.

This, added to the recent turmoil in the financial markets and the fact that output growth has been sustained, were the motivating factors behind the MPC's decision.

"Pay pressures remain muted. There are tentative signs of a slowing in consumer spending, but the recent solid pace of output growth has been sustained and the margin of spare capacity appears limited," the Bank of England said in a statement.

"It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households. As stated in its August Report, the MPC is monitoring closely the evolution of both credit spreads and the quantities of credit extended, alongside all other data relevant to the outlook for inflation," it continued.

Analysts say that the Bank's decision is not unexpected given the recent US sub-prime mortgage crisis - but warn that a further quarter of a percent rise could occur this coming November.

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