No change in interest rates
There will be no change in the base lending rate after the Bank of England voted to hold rates at 4.75 per cent.
This is the seventh month in a row that the bank’s Monetary Policy Committee (MPC) has voted for rates to be held at their three-year high.
However, the current freeze on interest rates is likely to end soon, with the majority of economists predicting that the cost of borrowing will rise to five per cent in the next three months.
Last month, MPC member Paul Tucker became the first person for five months to vote in favour of raising the base rate.
Since then other MPC members Rachel Lomax, Kate Barker, Charles Bean and Marian Bell have hit the financial headlines – with analysts suggesting their comments could be preparing the market for an interest rate hike.
These comments have been mixed in with economic data showing a stabilising housing market, good employment figures and increasing consumer confidence – all things which could contribute to higher inflation, thereby forcing an interest rate hike.
The bank increases and decreases the base rate of borrowing in the UK in an attempt to keep inflation as close as possible to its two per cent target.
