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Buy To Let & Property News Archive
22 Nov 07 - Rates Frozen Amid Inflation Fears
Continuing concerns over inflation led the Bank of England
to hold interest rates in November, it has been revealed.
Minutes from the Bank's Monetary Policy Committee (MPC)
meeting said members had kept rates at 5.75% after oil and
food prices soared dramatically.
Members also said they would "wait and see" before
cutting rates, wary that a snap decision could cost the
economy in the long-term. "There [are] risks attached
to a pre-emptive cut if the slowdown in activity was more
muted, and the rise in inflation in the early part of the
forecast period was sharper than expected," the minutes
stated.
Experts had predicted that a cooling of the housing market
and slowing business activity would lead to a cut in rates,
after the Bank's latest inflation report signalled there
may be two cuts next year. However, the MPC's latest move
suggests the Bank will be taking a more cautious approach.
ING economist James Knightley said: "We suspect that
the Bank will want firmer evidence that the economy is slowing.
"Moreover, with inflation being pushed higher by food
and energy costs - the uncertainty factor may keep the MPC
on hold for a couple of months."
Source: Bank of England
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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