UK interest rates expected to remain at 4.5 percent

The Bank of England, the central bank of Britain, is widely tipped to leave UK interest rates on hold at 4.5 percent this week for the second month running at the end of its two-day meeting.

Rising inflation, partly fueled by rising oil prices, could deter the central bank's Monetary Policy Committee (MPC) from cutting rates in the near-term. Inflation rose to a nine-year peak of 2.4 percent in August, breaching the central bank's 2.0 percent target.

"It seems a nailed-on certainty that the Bank of England will hold interest rates steady on Thursday," said Howard Archer, economist at Global Insight.

"What happens after the October meeting is far from clear." This was echoed by comments from MPC member David Walton last month.

"If I have left you feeling uncertain about the future course of interest rates, then you are in good company," he said in a speech.

The central bank's MPC cut rates by a quarter point in August to revive consumer spending.

But shops are still struggling as soaring fuel bills keep consumers wary.

Sales volumes on the High Street fell at their fastest pace for 22 years last month, according to the Confederation of British Industry.

Consumer confidence is still slipping away, according to the Nationwide Building Society. Its monthly confidence index dropped to 94 in September from 100 in August.

It seems a nailed-on certainty that the Bank of England will hold interest rates steady on Thursday.

Though manufacturing activity picked up last month, the UK's service sector expanded at its weakest pace in nine months in September.

Soaring energy prices have pushed up company costs, threatening future profits.

On the other hand, August's rate cut may have nudged the housing market out of its slumber.

Mortgage approvals have risen and some economists believe a stronger property market will trigger a revival in consumer spending.

Source: Xinhua