The Bank of England's Monetary Policy Committee today voted to maintain the Bank's base rate at 4.5%

Trevor Williams, chief economist at Lloyds TSB Financial Markets, said: "In part, the decision tokeep rates on hold will have been based on growth in the services sector. A quick reading of recent figures indicates that the sector is likely to be growing at 1% per quarter - up from three quarters of 1%- not in itself excessive, but with services accounting for almost three quarters of the economy, it's a rise which is bound to lead to faster overall growth in due course.

"The real deciding factor, however, will have been the steady improvement in the housing market.Hopes of a recovery in consumer spending have been pinned on the housing market's return to health and the MPC will be keen to see the modest rise in property prices continuing. However, the trick for the Bank of England will be to stimulate a rise in house prices, which is modest enough to help consumer spending but which prevents the return of a another boom that could be potentially destructive for the economy."

"So while the arguments for a cut in rates have undoubted merit, the case for holding remains as robust as ever."

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