The Bank of England left interest rates on hold for the 14th month in a row today in a move that is likely to anger worried union leaders.

Its nine-strong Monetary Policy Committee (MPC) voted to keep the cost of borrowing at a near-40 year low of 4 per cent, as forecast by the City.

Earlier this week, union bosses called for a cut of at least 0.5 per cent to prevent tens of thousands of job cuts in the manufacturing sector.

Amicus warned that 200,000 jobs could be axed this year unless action was taken to repair the damage done by the global downturn.

But the MPC is likely to have weighed up these concerns against fears a cut could give a further boost to the red-hot housing market.

Despite signs of a slowdown on the high street, economists believe the housing market needs to come off the boil before a cut can be made.

House prices shot forward by more than 25 per cent last year as homeowners cashed in on the cheapest mortgage rates for almost half-a-century.

Ross Walker, economist at Royal Bank of Scotland, said the MPC's decision was "as expected" and added that rates could be on hold for some time yet.

He said: "Although we have had some evidence of a consumer slowdown, the MPC will want to look at the data over a longer period of time."

Figures out seven days ago showed the manufacturing sector contracted in December on the back of weak demand from customers in Europe.

Lacklustre Christmas trading statements from retailers this week have fuelled fears that shoppers are beginning to be more cautious.

The consumer sector proved a vital prop to the UK economy last year as manufacturers battled the recession caused by the global slump.

But the Engineering Employers Federation urged the MPC to act next month given the "warning signals" from all areas of the economy.

Chief economist Ian McCafferty warned: "The Bank will need to watch closely for signs of renewed weakness in the economy over the coming months."