London - The Bank of England Thursday kept interest rates on hold at 5 per cent in an attempt to balance inflation fears with growing signs of a serious economic slowdown.

The cautious decision by the central bank's Monetary Policy Commitee (MPC) follows steep rises in energy bills and a decline in the housing market which have contributed to a downward revision of growth forecasts.

It also reflects the anticipation by economists that inflation, currently at 3.8 per cent, could surge as high as 5 per cent by the end of the year, but fall next year. (dpa)