The Bank of England is facing pressure both to cut and raise rates - so will probably keep them as they are as a result.
The Bank of England is likely to keep interest rates at five percent for the foreseeable future, economists have claimed.
No resolution is expected by Global Insight for the Bank's nine-member Monetary Policy Committee (MPC), the body which sets the rate each month - as it is facing conflicting economic pressures relating to its decision.
The UK's slowing economy, with both the government and the International Monetary Fund recently downgrading their GDP growth forecasts, has caused many industry groups and mortgage lenders to call for rate cuts. This is because the move would make loan repayments cheaper, and therefore provide an economic stimulus by giving people more money to spend.
On the other hand, rising inflation - with the government's own Consumer Price Index rising to an above-target 3.8 percent on its last reading - has led other groups to call for a rise in the base rate. This is partly due to the fact that rising inflation directly erodes the value of loans, and therefore increased interest rates are required to make up the shortfall for lenders.
As a result of these conflicting pressures, a three-way split was marked at the MPC's July meeting; while seven members voted for no change to the rate, one member each voted for a 0.25 percent rate rise and a 0.25 percent reduction.
Howard Archer, UK chief economist at Global insight said: "I think [the MPC] will probably keep interest rates unchanged for quite a few more months to come.
"Over time very weak economic activity and rising unemployment should help to keep a cap on inflation pressures and that should eventually allow the Bank to cut interest rates, but with inflation probably likely to near five per cent later this year it could well be that they are unwilling to cut interest rates before early next year."
