UK consumers should be wary of inflation
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.