The Bank of England has voted to hold interest rates at 4.75 per cent, following August's 0.25 per cent rise, which took many experts by surprise.

Most economists and traders expected this month's decision to hold the base rate, with all 103 economists surveyed by news agencies Reuters and Bloomberg predicting the step.

High street bank Abbey said that the bank's monetary policy committee (MPC), which makes the decision, was probably using a 'wait and see' tactic following last month's unexpected rise, the first for almost two years.

The chief economist at Abbey suggested that the monetary policy committee is likely to want to evaluate the current economic news and assess whether that change made in august has had an impact on economic activity and inflation predictions.

However, many experts are predicting that there will be a further rise in interest rates in October or November, after the bank said that it expected inflation to increase in the next few months.

Personal loans are affected by base rate rises as this has a knock-on effect on interest rates for loan repayments.

Interest rate decision was six to one - 16th August 2006

Bank announces surprise interest rates rise - 3rd August 2006