Bank of England under pressure to shelve interest rate rise

Worse than expected factory orders and weak consumer demand for credit dents prompts sterling sell-off

Heavy selling sent the pound tumbling to its lowest level against the US dollar in more than three months after a double dose of economic bad news convinced currency dealers that the Bank of England would ditch plans to raise interest rates next week.

A sharper than expected slowdown in manufacturing and signs that hard-pressed consumers have lost their appetite for borrowing added to growing evidence that the UK economy has lost momentum since the turn of the year.

Lenders have already bumped up the cost of fixed rate mortgages ahead of the Bank of England's decision to raise base rate from 0.25% to 0.5%, and mortgage borrowers on tracker and variable rates will see their monthly payments become more expensive in the coming days. "