THE Bank of England gave homeowners and manufacturers further respite yesterday by keeping interest rates unchanged for the seventh month in succession.

The Bank's monetary policy committee (MPC) kept the base rate at 4.75 per cent, the level at which it has remained since the bank last raised rates by a quarter of a per cent in August.

Economists had predicted no change, although some had not ruled out an increase due to the risk of inflation exceeding Chancellor Gordon Brown's two per cent target in the next two years.

They said MPC members had probably delayed a rate rise to wait for further evidence of consumer spending growth and wage inflation.

Business leaders welcomed the decision, saying companies and manufacturers in particular continued to face underlying risks.

The director general of the British Chambers of Commerce, David Frost, said there were no powerful arguments for an immediate change in rates.

"We strongly urge the MPC to persevere with a cautious stance," he said.

Manufacturers' organisation the EEF said it believed the overall economic picture remained mixed enough to allow the bank continued breathing space, especially with the prospect of higher energy costs and a stronger currency.