Bank of England holds rates, cut seen in Feb

(Reuters) - The Bank of England left interest rates unchanged on Thursday, following a week of intense speculation over whether it would cut them for a second month running to shore up economic growth.

The Bank held the main rate at 5.5 percent, having lowered it a quarter percentage point in December.

Still, the pause is likely to be short-lived and the Bank is widely tipped to cut rates again in February, when it publishes new growth and inflation forecasts.

The pound rose after the decision while Britain's index of leading shares .FTSE turned negative with retail stocks taking a sharp knock.

Most economists had predicted a no-change verdict but money markets, spooked by signs of a consumer retrenchment, were pricing in a 60 percent chance of a cut.

"We suspect that the deteriorating growth outlook, particularly for the household sector, was balanced by worries on inflation," said James Knightley at ING Bank.

 

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