The largest public service sector increases in two years mean that an interest rate cut next week is unlikely, according to an economic expert.

The largest public service sector increases in two years mean that an interest rate cut next week is unlikely, according to an economic expert.

The Chartered Institute of Purchasing and Supply/RBS service sector business activity index rose by 1.9 points to 58.9 between January and February this year.

"Robust service sector activity in February makes it even more of cast iron certainty that the Bank of England will keep interest rates unchanged next Thursday," said Howard Archer, chief economist at consultancy Global Insight.

The Bank of England's monetary policy committee last cut interest rates by 25 base points to 4.5 per cent in August 2005.

A number of property price indices suggest that house prices have risen in the first month of 2006 and this week the British Banker's Association claimed that mortgage lending in January 2006 totalled £14.5 billion in January 2006, a 25 per cent increase on the same month a year ago.