The Bank of England has shrugged off calls for a cut in UK interest rates.

The Bank's key base rate remains at 4% for the 14th month in a row.

Mounting fears that the consumer spending boom could be over had increased calls for cut in interest rates this month.

And the trade union Amicus had warned that a rate cut is essential to save thousands of jobs in the manufacturing sector.

But many independent economists had argued that it was far too early to be gloomy about the British economy, where the danger of inflation is still present.

While a rate cut might be expected to stimulate spending by companies and individuals - and hence perk up the economy - it might also give unwanted encouragement to galloping house prices.

Steady as she goes

Sir Edward George, governor of the Bank of England, implied last week that he was not keen on a cut in rates.

"We're anticipating that the UK economy will grow close to trend, that inflation will remain close to target, [and] that's not something that implies a sharp change in interest rates in either direction," he said in a BBC interview.

Sir Edward cautioned against reading too much into recent surveys indicating a tightening of consumer purse strings.

A number of major retailers have unveiled unexciting Christmas trading figures over the past few days, sparking fears that the economic motor of High Street spending could be giving out.

But many economists say the figures are far from conclusive.

Jobs at risk?

Amicus, the UK's second largest union, said if the Bank did not cut interest rates 200,000 jobs would be lost in the manufacturing sector.

About 700,000 jobs have gone from the manufacturing industry since 1997, bringing employment levels in the sector to a record low.

Last week, a survey from the Chartered Institute of Purchasing & Supply showed a contraction in manufacturing for the first time in five months, prompting fears that the sector is heading back into recession.

But monetary policy officials have fought shy of adjusting interest rate policy to suit manufacturing, arguing that the sector must sink or swim on its own merits.

Hot houses

The key factor behind the decision to keep rates steady was likely to have been the property market.

A survey earlier on Thursday from the Halifax bank showed that house-price inflation was continuing more or less unchecked, something that causes some concern to financial policy makers.

Trimming interest rates further, some say, could fuel the housing boom and exacerbate record personal debt levels.