The Bank of England today left interest rates unchanged at 4.75% for the ninth month in succession, with the move coming amid growing concerns over consumer spending and manufacturing.

Just hours before the Bank's monetary policy committee (MPC) met, more evidence of the parlous state of the UK's manufacturing sector emerged.

The Office for National Statistics (ONS) said manufacturing production had plummeted by 1.6% on the month in March, while overall industrial production fell by 1.2%.

"The industrial production data for March are horrendous, and point to a downward revision to UK growth in the first quarter from 0.6% quarter-on-quarter to at least 0.5% quarter-on-quarter," Howard Archer, of the consultancy Global Insight, said.

The Bank also has to contend with signs of a sharp slowdown in consumer spending, a key prop to the economic growth of recent years. Last week, the Confederation of British Industry (CBI) reported another drop in retail sales.

According to the CBI's monthly distributive trades survey, the volume of retail sales again fell in the year to April - the most significant year-on-year fall for 13 years.

The budget clothes store Matalan last week said sales plunged in March and April, while the fashion chain French Connection described the first five weeks of 2005 as "awful". However, it said business had improved since early March.

The flurry of weak data has forced City analysts to reassess their expectations of an imminent rise in borrowing costs. Many now expect the next move to be down, with fears of a slowdown outweighing concerns about rising inflation.

Of 45 economists recently polled by Reuters, 43 predicted the MPC would leave borrowing costs unchanged today. That was a marked turnaround from a month before, when 17 analysts forecast a quarter-point rate rise at this month's meeting, which was delayed because of the general election.

"My suspicions are that a continuation of the weakness of consumer spending and a further step down in house price inflation could prompt the committee to lower interest rates in August," Roger Bootle, an economic adviser to Deloitte, said.

"And even if it waits, it is very likely that rates will be falling by the end of this year and could drop all the way to 3.5% by the end of next year."