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11 Jan 08 - Bank Freezes Interest Rates At 5.5%
Buy-to-let landlords have been left disappointed by the Bank of England's decision
to keep interest rates on hold.
The Bank's Monetary Policy Committee voted to keep the
cost of borrowing at 5.5%, dashing hopes of a second cut
following December's quarter-point reduction.
Experts believe the decision rested on a knife edge, as
worrying house price data over the last few months would
have increased the pressure on the MPC to act in an effort
to fend off the threat of a recession.
But the Bank is responsible for keeping inflation under
control, and the benchmark Consumer Prices Index is currently
running above the Government's 2% target at 2.1%. It is
thought this, coupled with a desire to see how the rate
cut in December effects the economy, persuaded the nine-strong
MPC to freeze interest rates for now.
Global Insight's chief UK economist Howard Archer believes
rates will now be reduced in February, and could eventually
fall as low as 4.5% by the end of the year.
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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