Base rate should remain at 5.5%
June 6, 2007 by admin
Filed under News, News-Loans
We are likely to see interest rates rise again this summer but borrowers can sit comfortably for the rest of this month at least.
The Bank of England Monetary Policy Committee (MPC) is due to announce a base rate decision on Thursday June 7th but industry figures are not predicting another rise.
Interest rates have increased four times since August 2006, taking them to 5.5 per cent, the highest level since April 2001.
Despite many experts seeing it as inevitable that the base rate will rise again before the end of the year, Lloyds TSB says that it does not expect another rise in June.
“We may well see a rate rise before the summer is out, but a move this month is highly unlikely. We’ve seen rates increased four times since August last year and the effects of these are only just starting to show through – inflation is coming off the boil, the housing market is cooling and signs of slower activity are appearing in the retail sector,” said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.
“However, it’s still too early to judge the full impact of these cumulative increases, especially those that have taken place in the past nine months.
“The most likely outcome of this month’s meeting is that the MPC will opt to hold rates and buy time to gauge the impact of recent increases, before making another move,” he concluded.
The news will be welcomed by those with credit cards, loans and mortgages.
