‘Interest Rates’ News
Interest rates set to fall to 4.5% by year end
Posted 2008-02-16
Interest rates are set to fall to 4.5% by the end of 2008 according to research by Global Insight. The financial research company also believe rates will drop further to 4% by mid 2009. Howard Archer, Chief European and UK Economist for Global Insight said: “We currently forecast interest rates to fall to 4.5% by the end of 2008 and to 4% by the first half 2009. This is based on our assumption that the UK will avoid recession, but will see extended below trend growth.” On top of falling interest rates, the company also believes the UK’s GDP growth will be limited to 1.8% between 2008 and 2009 - the equal weakest performance since 1992. ...
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Base rate cut by 0.25%
Posted 2008-02-5
In response to signs that the UK economy is slowing down, the Bank of England has cut the base rate of interest by 0.25%. Widely predicted by financial experts, the cut will be welcomed by borrowers, the day after energy supplier E.On became the latest major power company to raise prices. The Bank ruled out a larger cut, trying to stimulate slower economic growth, whilst being wary of a potential rise in inflation. Ray Boulger of John Charcol said: “With the Monetary Policy Committee (MPC) receiving significant criticism for not cutting the rate for the second consecutive month in January, after a unanimous vote for the December cut, together with discussion on whether the 0.5% cut might be necessary to achieve economic stability, there was never any real doubt on the outcome of today’s meeting.” Mr Charcol added: “The MPC is now effectively running hard to stay still.” ...
Consumers worried about inflation
Posted 2008-02-2
Consumer confidence is being dented over fears about the rising rate of inflation. The latest Consumer Barometer from Lloyds TSB Corporate Markets shows that the level of people expecting interest rates to be higher rather than lower in 12 months grew by two per cent in January. In turn, this concern is damaging consumer confidence in the UK. Trevor Williams, chief economist with Lloyds TSB Corporate Markets, believes that even further interest rates may not stem the worry consumers are feeling. He said:”As far as consumers are concerned, any respite granted in interest rates today will be short-lived. Even so, if we do see a cut this will ease the burden of interest payments and as such will help boost economic activity.” ...
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UK consumers should be wary of inflation
Posted 2008-02-1
The Bank of England’s recent interest rate cut could fuel inflation, according to the price comparison website fool.co.uk. The Bank’s decision was not unexpected, but with rising energy costs and high oil prices, the cut could push up inflation. Fool.co.uk believes that the Monetary Policy Committee is willing to let inflation rise in order to avoid a recession. David Kuo, head of personal finance at fool said: “Consumers should be aware of the damaging effects of inflation even if the Bank of England chooses to ignore it for now. In order to beat rising prices, we need to ensure that any savings we have will guarantee a better return.”Meanwhile, the Bank of England has predicted that demand for secured loans is set to rise in the first quarter of 2008 as lenders tighten up other credit products. ...