Market expects rate freeze on weak PMI data

Mervyn King's argument for keeping interest rates at a record low 0.5% has received a boost from the latest construction data showing economic growth is not yet strong enough.

The Bank of England's governor is up against three hawkish policymakers calling for a rate rise to combat soaring inflation, which is still twice the MPC's 2% target. Yet data released yesterday showed growth in the UK construction industry slowed sharply in April, with the Purchasing Managers' Index for construction falling from 56.4% in March to 53.3% in April. The results were weaker than expected and supports expectations the BoE will maintain interest rates at 0.5% in its decision later this morning. Over 40 economists also predict rates will be kept on hold at 0.5%, according...