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Base rate set to increase to 5.75 per cent?

July 3, 2007 by admin  
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The Bank of England’s monetary policy committee may be tempted to increase the base rate to 5.75 per cent at this week’s monthly meeting on Thursday, many commentators believe.

Howard Archer, chief economist at the Global Insight consultancy, claims that the committee will experience a “very tight vote again”.

At last month’s meeting, the governor of the Bank of England Mervyn King’s desire to increase rates for a fifth time since August 2006 was blocked by MPC members for the first time since the bank gained independence ten years ago.

Mr Archer said that only one of the five who voted to hold rates at 5.50 per cent last month would have to change their vote to effect a rate rise.

Last month, Mr King said that Britons should expect a further interest rate increase to cope with an over-heating economy and increasing inflationary pressures.

Despite UK inflation falling to 2.5 per cent in May, this was still some way below the government’s two per cent target.

Tags: britons, inflationary pressures, month, governor, mr archer, bank, time, economy

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