BoE: Interest rates to stay steady

Bank of England governor Mervyn King today signalled a hike in interest rates to 6% was off the cards and hinted policy-makers were ready to cut the cost of borrowing if the credit crisis deepened.

Mr King suggested that rates would be held at 5.75% until the current turmoil in financial markets passed, with households already facing increased borrowing costs as banking groups pass on steep rises in inter-bank lending rates.