The Bank of England's monetary policy committee (MPC) today voted to leave the base rate of interest on hold.

Despite some suggestion of a possible cut, the MPC followed most analysts' predictions and voted to leave the cost of borrowing unchanged at 5.75 per cent.

This means interest rates have been at the same level since July, but have still increased three times this year.

Homeowners would have hoped for a cut but will be relieved that talk of another increase has now been pushed on to the horizon.

With the credit crunch reining in the activity of lenders and consumers beginning to adjust their behaviour inflation is now less of a concern.

Credit is now harder to obtain and more expensive, while the summer's floods have pushed up insurance premiums.

But with inflation having only recently dropped below target and the big-spending Christmas period approaching, the MPC opted not to follow the lead of the US Federal Reserve, which last week slashed interest rates to stimulate the financial markets.

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