Interest rates stay on hold at 5.75%
November 26, 2007
As widely predicted by many analysts and economists interest rates have remained on hold at 5.75% after November’s Monetary Policy Committee meeting.
This is the fourth month in a row where interest rates have remained unchanged, and despite rising speculation with regards to the Bank of England’s decision to keep rates on hold there was no official statement released along with the announcement that changes were not being made to the interest rate.
The Bank of England raised interest rates five times between August 2006 and July 2007, taking the base rate from 4.5% to 5.75%. However, since then it has kept rates on hold for a variety of reasons. The effects of the credit crunch that has swept across the country was one of the main contributory factors. However, it is thought that one of the main reasons behind this month’s decision could be fears relating to the risk of rising inflation.
Many economists had predicted a cut in interest rates for this month following October’s MPC meeting. However, over the course of the months a number of experts changed their views. Rising oil prices in particular are thought to have caused concern with regards to the risk of rising inflation.
One official from the Institute of Directors stated: “It would have been very unsettling if, in the week oil prices nudged $100, the MPC reduced rates.”
He added: “The impact of the credit crunch in the UK remains highly uncertain and consequently, the MPC is waiting for more information on the extent of economic slowdown before lighting the stimulus fuse, by reducing rates.” However, the British Chamber of Commerce said it was disappointed with the decision given the struggling financial markets, low consumer spending levels, and stable rate of CPI inflation.
Alan Wright
26th November 2007
Recent additions:
- ky broadband breaks through one million barrier
- FSA calls for greater transparency from its members
- Did you close down your Northern Rock ISA
- EPC requirements postponed on new build properties
- Standard Life pensions customers at risk due to security breach
Related Articles
- Bank claims should remain on hold The High Court judge that is dealing with the test case on bank charges between the UK's banks and the Office of Fair Trading has
- Customer receives compensation from HSBC A banking customer has received compensation from his bank, HSBC, after making a complaint over the marketing materials relating to the bank's savings account, stating
- More jobs being created at Nationwide At a time when many financial institutions are cutting jobs and sending call centres abroad in order to save money and due to the effects
- HIPs may be affecting the housing market estate agents Home Information Packs were introduced in the UK earlier this year by the government, and these packs, known simply as HIPs, are now a legal
- PPI still under investigation Over the past year PPI, or Payment Protection Insurance, has hit the financial headlines on many occasions, after it was found that many lenders were
Comments
Got something to say?