Interest rates 'will not alter much in 2011'

Posted: 04 Jan 2011 10:30:45 GMT

One expert has claimed interest rates will not alter a great deal over the course of 2011.

Interest rates will stay low this year because of inflation pressure.

This is the view of Michael Baxter, editor of InvestmentandBusinessNews.co.uk, who said the rates will be affected by what happens in Ireland.

"If markets start questioning whether or not government debt is safe and if there is a history of the government defaulting, then that could push interest rates and markets up," he added.

Individuals have claimed interest rates need to increase because inflation is high, but that is not the case, as commodity prices have risen, Mr Baxter noted.

He explained if the figures were to swell it could make the situation worse, because many people are already struggling.

According to a recent poll of economists by Reuters, the Bank of England will not change its base rate until October 2011 and when it does it go up it will only be to 0.75 per cent.

Elsewhere, VAT has gone from 17.5 per cent to 20 per cent today (January 4th).
 

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