15 November 2006
Finally, some good news has arrived for consumers who have taken out loans as the possibility of further interest rate rises eased today.
Official figures from the Office for National Statistics state that the consumer price inflation had remained at 2.4%. If inflation stays at a similar level or drops lower, there will be less need to raise the base rate of interest.
Lower petrol prices are thought to have been the main factor in keeping inflation down, with analysts previously predicting that the rise in student fees would have raised inflation to 2.6%.
Many economists now believe that when the Bank of England release its inflation report later today, it will leave the door open for further rate rises, but it will not suggest a rise so soon after the quarter point increase of last week.
Philip Shaw, chief economist at Investec told Reuters: "Our guess is that uncertainties over UK growth prospects and a looser labour market will encourage the monetary policy committee to refrain from making too strong a statement over inflation."
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