Interest rates frozen
June 7, 2007 by admin
Filed under News, News-Mortgages
The Bank of England has decided to freeze interest rates at 5.5 per cent.
The monetary policy committee (MPC) made the decision following a quarter point rise in May and after four rate rises since August 2006.
Industry figures had widely predicted the move as it was thought that the MPC would want to wait and see what effect the last rise had.
Despite the decision being good news for those with loans, mortgages and credit cards, borrowers are being warned that further rate rises are likely in the near future.
“The majority of economists are calling for a rise in July but if we need another increase it would be more logical for the MPC to wait until the next quarterly inflation report in August before making that decision,” said Ray Boulger from mortgage advisor John Charcol.
“With the total previous rise of one per cent looking like it is doing the trick, I believe the MPC will want more time to see if this is indeed the case.”
This sentiment has been supported by a number of figures, with research firm Global Insight also predicting another rate rise in August.
“We believe that the MPC is likely to act by August at the latest to try to stamp out the significant upside risks to longer-term price stability,” said Howard Archer from the firm.
