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Bank of England holds interest
LONDON, England (CNN) -- The Bank of England (BoE) left the cost of borrowing on hold Thursday but economists expect a rate cut in the coming months. In February the BoE, which sets rates for the UK, had surprised the market with a cut to a 48-year low of 3.75 percent. "We certainly couldn't rule out a surprise cut again," Michael Taylor, economist at Merrill Lynch, told CNN before the decision. "We believe a rate cut is due in May or June because economic data has been broadly on the weak side." Economists said the BoE may choose to sit out the war in Iraq before deciding what impact it has had on the economy. But consumer and business confidence has been hit hard by the war, according to surveys. The Confederation of British Industry said retail sales fell at their fastest rate for nearly 11 years in March. And Gordon Brown, the UK finance minister, was forced on Wednesday to cut his growth estimate for the economy to between 2 percent and 2.5 percent this year, from a pervious estimate of 2.5 to 3 percent. (Full story) He blamed an economic slowdown in other major economies, like Germany, Japan and the U.S. Most economists expect the BoE to wait until it releases its growth and inflation report in May before it considers another cut. Britain is yet to sign up to the European single currency. Interest rates for the 12 nations within eurozone are set by the European Central Bank.
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