8 July 2008
Interest rates will probably remain on hold at 5% for the remainder of 2008, one economist has claimed, because of a weakening economy. The Royal Bank of Scotland's Ross Walker noted that inflation is rising and therefore the Bank of England's monetary policy committee (MPC) will be reluctant to lower rates, something that those with credit cards may be interested in. But he added that due to a slowdown in the economy, it is unlikely that the base rate will be hiked either, something that points to a hold. Mr Walker suggested that such "doubt" will eventually lead to cuts, but only in the first half of next year. "Our forecast is cuts in the first and second quarters of next year - 25 basis points in each," he commented. A decision by the MPC is due to be announced on July 10th, following a meeting that lasts for two days. Interest rates were held by the body in June but cut in April, from 5.25%.
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