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Bank of England Holds Rate Steady

December 7, 2000

LONDON (AP) _ The Bank of England left its key lending rate unchanged at 6 percent Thursday, for the 10th consecutive month.

The base lending rate is what Britain’s central bank charges other financial institutions in the United Kingdom and is a benchmark for the rates commercial banks charge on their own loans to individuals and businesses.

The rate is the Bank of England’s major tool for controlling inflation. The bank can raise the rate to discourage borrowing and therefore dampen the risk of inflation, or lower the rate if it wants to make loans cheaper as a way to stimulate the economy.

The bank’s Monetary Policy Committee, which reviews the base rate each month, did not explain its decision.

The committee last raised the rate in February, from its previous level of 5.75 percent.

``There is now mounting evidence to support the argument that U.K. interest rates have peaked. Inflation pressures remain subdued, and this week’s data on retail sales indicate consumer demand may be softening,″ said Kate Barker, chief economist at the Confederation of British Industry.

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