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Interest rate futures fell as some investors had banked on the possibility of an interest rate cut due to the magnitude of the economic slowdown, reports Reuters.
George Buckley, chief UK economist at Deutsche Bank, commented: "We continue to see rates being cut - but not until next year when the inflation peak should have passed."
The European Central Bank also froze its interest rates at 4.25 per cent as had been expected.
According to the Organisation for Economic Co-operation and Development, the UK's economy is likely to shrink in the third and fourth quarters of 2008.
Meanwhile, the Guardian claims that while countries such as the US, Canada, Japan and Germany will escape recession, the UK will succumb due to a decade of unbalanced economic growth.
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