THE COST of borrowing remained unchanged, after the Bank of England‘s monetary policy committee met on January 13 and held the base rate at 4.75%.

The minutes of the meeting are not yet available, but there was surprise last month when records showed that the MPC even considered lowering rates.

The rate has not changed since the last rise in August last year.

“It isn‘t unexpected,” said Ian Kenny, head of agricultural policy at NatWest. “For the last five years, the MPC has held January base rates.

“At the moment, they‘re talking in the medium term about holding or even bringing down interest rates, but we‘re forecasting a 0.25% rise in August.”

Rising input costs and a difficult labour market were ratcheting up inflationary pressures, he added.

Agricultural business manager Euryn Jones with Barclays Bank welcomed the news and made similar predictions that rates would rise to 5%, before falling gradually over 2005.

Farmers were estimated to have borrowings of some £7bn in November, up 3% on the year before as the poor harvest and rising fuel costs took their toll.

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