INTEREST RATES will remain on hold at 4.75%, after the Bank of England decided to leave them unchanged in February.

Base rates have been frozen since August 2004 amid worries that the manufacturing sector would be damaged by further rises.

Minutes from the last meeting of the Bank‘s Monetary Policy Committee on Jan 13 show that members believed retail and house price growth remained on track.

Ian Kenny, head of agricultural policy at Natwest, said he expected to see a 0.25% rate rise in August, but a spokesman for Clydesdale Bank said May was a more likely date.

Figures due in coming weeks are expected to show that rising wages and good growth in the economy are pushing up inflation levels.

Agricultural business manager Euryn Jones with Barclay‘s Bank believed that rates would peak at 5%, before falling gradually over 2005.

• A quarter point rise in interest rates would add around £17.5m to farmers‘ repayments.