12 October 2005
Personal loan customers were offered few guarantees of better interest rates today, with the Bank of England dousing expectations that next month might see another rate cut announcement.
Mervyn King, the bank's governor, told Newcastle newspaper The Journal that the fluctuating signals being sent out by the country's economy mean that there is no guarantee that August's quarter-point cut will be repeated in November.
Employment levels may have reportedly soared in the three months leading up to August, but the drop in consumer spending alongside this demonstrates the uncertainty of the direction in which the economy is currently being led.
Mr King said that the bank would sit tight and not jump to any early conclusions about its next step.
"I can't promise an interest rate cut, but what I can promise is that we won't make up our minds until we meet in November," he stated.
In a speech delivered yesterday night, Mr King also warned that inflation is likely to be above target in the short term due to the negative effect that high oil prices are having on consumer spending.
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