Inflation report hints at further interest rate rise
Posted on 8 August 2007
The Bank of England has given a strong clue that it will raise interest rates again in the coming months.
In its latest Inflation Report, released today, the Bank judges that inflation is likely to fall to the target rate of 2% in two years’ time, providing interest rates “move in line with market expectations”. With most economists expecting the Bank Rate to reach 6% in the next six months, this indicates that the Monetary Policy Committee will raise the current rate of 5.75% by another quarter percentage point.
Introducing the report, the Bank’s governor Mervyn King said: “Inflation has fallen back quite sharply, from 3.1% in March to 2.4% in June, as household gas and electricity prices started to decline. It’s likely to fall back further over the next few months but could remain volatile in the short run, reflecting the unpredictability of energy prices and the British weather.”
Category: Mortgages
Categories
- House and home (53)
- Miscellaneous (10)
- Mortgages (160)
- Personal finance (116)
- Property (173)
- Regulation (113)
Archive
- February 2008 (11)
- January 2008 (30)
- December 2007 (31)
- November 2007 (28)
- October 2007 (30)
- September 2007 (29)
- August 2007 (38)
- July 2007 (55)
- June 2007 (51)
- May 2007 (43)
- April 2007 (9)