Interest rates have been kept on hold at 5 per cent despite calls for a cut to combat growing recession fears.

Union leaders and the British Chambers of Commerce had both urged a reduction.

The TUC's head of economics and social affairs, Adam Lent, said: "The recent spate of bad economic news shows that the great danger is recession, not inflation.

"With little domestic pressure on prices, the Bank must start to cut interest rates aggressively or the slowdown will be far worse than it needs to be."

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