INSTANT VIEW-Bank leaves interest rates at 5 percent

LONDON (Reuters) - The Bank of England kept interest rates at 5 percent for a fifth consecutive month on Thursday, as forecast by all analysts in a Reuters poll.

Following are reactions from business groups and economists to the decision.

NICK KOUNIS, FORTIS

"The BoE kept the Bank Rate on hold at 5 percent as expected. Despite signs that the economy is heading for recession, the awful near term inflation outlook and the risk that inflation expectations will become more permanently dislodged is making the central bank cautious.

"We think that BoE will eventually cut interest rates but it will probably not come until next year."

GEORGE BUCKLEY, DEUTSCHE

"The reason for the decision (in our view, as there is no accompanying statement) was due to i) they would not have seen the August CPI print and ii) the data over the past month has been relatively mixed.

"Indeed, on the stronger side the latest PMIs came in above expectations, money growth increased, official retail sales were up and inflation probably rose further in August. On the weaker side retail sales surveys were soft, the labour and housing markets showed further signs of slowing, the GDP details disappointed and the surveys eased lower.

"We continue to see rates being cut (by 100bps) but not until next year when the inflation peak should have passed."