LONDON (AFX) - The Institute of Directors said today that Monetary Policy Committee's decision to leave interest rates at 5.25 pct is "sensible", but said it expects rates to be cut to 5 pct or even lower if the international situation deteriorates further. Ruth Lea, Head of the IoD Policy Unit, said: "The British economy is undoubtedly showing some signs of buoyancy. The retail sector and the housing market, stimulated by the recent cuts in interest rates, are far from being depressed. Manufacturing output, on the other hand, is effectively in recession." "We have a two-speed economy. But, on balance, the MPC's decision to leave rates on hold seems sensible. The MPC may as well leave some weapons in its armoury," she said. She also said that given the "benign inflationary situation", the IoD expects a further easing in policy - down to 5 pct or even lower if the international situation deteriorates further. She added that the full impact of the foot and mouth disease outbreak has yet to be fully experienced.