CML tips rate rise to 5.75 per cent

Posted: 03 May 2007 11:47:27 GMT

In news that will be of interest to buyers and sellers alike, the Council of Mortgage Lenders (CML) has said a rise in the Bank of England base rate cannot be ruled out.

In news that will be of interest to buyers and sellers alike, the Council of Mortgage Lenders (CML) has said a rise in the Bank of England base rate cannot be ruled out.

The CML said in its market commentary that a rate rise by 0.25 per cent to 5.5 per cent next week "is considered a virtual certainty", while it notes that the markets have factored in a further rise this summer to 5.75 per cent, Firstrung reports.

A longer-term analysis of the Bank of England Interest Rates policy, published by the Halifax yesterday, shows that the situation has been more stable in the decade since chancellor Gordon Brown delegated rate-setting to the monetary policy committee (MPC) in his first policy move after Labour came to power.

It noted that, compared with the ten years before 1997, the number of changes in the rate has been fewer (34 compared to 46) and the range of fluctuation lower (from 3.5 per cent to 7.5 per cent compared with 5.25 per cent to 15 per cent).

Chief Halifax economist Martin Ellis said: "The past decade has been a period of remarkable economic stability.

"Interest rates and inflation have both been lower and varied in a much narrower range since the MPC took over responsibility for setting interest rates than in the previous 10 years."



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