INSTANT VIEW - Bank of England leaves rates at 5 percent

LONDON (Reuters) - The Bank of England left interest rates at 5.0 percent on Thursday, as expected by all economists in a Reuters poll.

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

MATTHEW SHARRATT, BANK OF AMERICA

"No surprise from the Bank with rates on hold. The take-away is that despite signs of stagnation in the economy or at worse recession, it is too early for the Bank to see an end to inflation risks.

"Rates will probably remain on hold in coming months with rates cuts beginning in early 2009 depending on the outlook for the economy."

JAMES KNIGHTLEY, ING

"The Bank of England is trapped between rising inflation and weakening growth and it could be early 2009 before the BoE has enough room to act in either direction.

"We believe that aggressive rate cuts will be the eventual outcome as the recessionary economic environment limits corporate pricing power and the scope for higher wage agreements.

"Along with the declines in commodity prices, we remain hopeful that this will result in inflation falling sharply through 2009, paving the way for around 150 basis points of rate cuts by the end of the third quarter 2009."  Continued...