Borrowers hoping for an imminent cut in interest rates had their hopes dampened after the Bank of England forecast robust growth and inflation on track to stay close to its 2 per cent target.

In its Inflation Report, published every three months, the Bank forecast gross domestic product (GDP) of 2.7 per cent for 2006, compared with a prediction of 2.5 in November last year. It described the outlook for inflation as "broadly balanced".

Arguments for a rate cut have been based on poor consumer spending figures, rising unemployment and a slower housing market.

Last week's predictions of economic buoyancy - based on expectations that spendingwon'tfal any further and that the property market wil remain steady - are likely to rule out any cut in the near future.

The base rate has been kept on hold at 4.5 per cent since August last year.

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