UK interest rates held at 5.5 percent

Source: Technology Digital

Date :07/06/2007 12:57:31

Following its meeting today the Bank of England has announced that interest rates will remain at 5.5 percent for the current month.

However analysts believe that a further rise will be very likely later this year if inflation is to be kept under control.

Commenting on today’s announcement, the CBI’s Chief Economic Adviser Ian McCafferty said: “By leaving rates on hold this month, the Bank has resisted rushing into a rate rise that, though widely expected, may still prove unnecessary. Despite recent data showing selling prices rising more rapidly across a number of sectors, evidence is starting to emerge that the four rate rises since August are having an impact.

“Signs of slowing retail sales growth and softening housing market growth suggest demand is starting to ease. As a result, the recent ability of companies to push up prices is unlikely to continue.

“It would be wrong to rule out a further increase to 5.75 percent later in the year, but pundits should not assume that such a move is a done deal.”