Interest rates held for another month
The Monetary Policy Committee (MPC) yesterday announced that interest rates would be held at 0.5 per cent for another month. This means that interest rates have been held for 27 months in a row.
An eventual interest rate rise could come even later than many economists have been predicting after the International Monetary Fund (IMF) said Chancellor George Osborne should continue with his deficit-reducing plans. It said that the rise in inflation over the past few months was unexpected but that this did not mean that macro-economic policies should be adjusted.
The IMF said inflation will return to the Government’s target of 2 per cent by the end of next year. It backed interest rates at 0.5 per cent and said if growth resumes they should rise, but gradually.
This has led many to assume that interest rates will not rise until 2012. But borrowers should not be complacent about this and should seek advice from Private Finance if they are coming to the end of a fixed or discounted mortgage deal.