Analysts predict 'no rate change' in September

Posted: 29 Aug 2008 13:21:27 GMT

            Property News - Analysts predict 'no rate change' in September

It looks likely that the Bank of England will once again choose to hold interest rates at five per cent in September, according to several experts.

The bank's monetary policy committee (MPC) is set to announce a decision on the base rate on Thursday, September 4th, after its monthly two-day meeting.

Despite rising inflation in the housing market and difficulties that individuals are having securing mortgages, it has held the rate at its current level of five per cent since April and is unlikely to introduce cuts next month.

Jonathan Loynes, chief European economist at Capital Economics, suggested that the MPC will hold rates as it attempts to strike a difficult balance between weakening activity and high inflation.

Agreeing with this sentiment, a spokesperson for the Council of Mortgage Lenders said: "Until it is clearer that we are over the spike in inflation we don't expect the bank to be able to move to ease interest rates."

Even so, the last few weeks have seem some downwards movement in terms of the interest rates attached to fixed mortgages. Recently, Woolwich cut its fixed rates by as much as 0.28 per cent, as a result of declining Swap rates.

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