Bank of England keeps rate unchanged at 5% to stave off inflation (Update1) (08-05-2008)

May 8 (Bloomberg) -- The Bank of England Monetary Policy Committee, led by Governor Mervyn King, left the bank rate at 5 percent, guarding against inflation after three cuts in borrowing costs since December.

Of the 61 economists in a Bloomberg News survey, only five were expecting a quarter-point reduction.

The central bank, which last cut the benchmark rate in April, will lower it to 4.75 percent by June, according to the forecasts of all but 10 of the 51 economists surveyed by Bloomberg News.

Britain's rate is the highest of the Group of Seven nations. The U.S. Federal Reserve cut its main rate on April 30 to 2 percent, the lowest since 2004. The European Central Bank will probably keep its rate unchanged at 4 percent at 1:45 p.m. in Frankfurt, all 53 economists in a Bloomberg survey predict.

Source Update1