5 December 2006
Homeowners with secured loans are breathing a collective sigh of relief this morning as the vast majority of economic analysts state that they are confident that the interest rate will hold, ahead of tomorrow's monthly review by the monetary policy committee.
The Bank of England has already raised the interest rate twice in the last quarter, affecting thousands of consumers with loans, mortgages and debt arrears.
Thankfully, strong growth in retail and the continuing boom in the property market are believed to have had enough of an impact on the economy to prevent further rises, with Organisation for Economic Co-operation and Development going as far as to say that interest rates in the UK have now "peaked".
It its twice-yearly economics report it predicted that as long as the headline inflation remains where it is there would be no need to raise interest rates.
It also highlighted the growth within the retail sector during the autumn, despite clothes sales being hit by the unexpected warmer weather.
Howard Archer, chief UK and European economist at research firm Global Insight, said: "The unexpected stabilisation in consumer price inflation is very good news for the Bank of England and obviously reduces the likelihood of another interest rate hike early in 2007."
Consumers often choose to take out a secured loan as the repayments are often more manageable, due to the added security of the loan being held against the customer's house, but interest rates do affect the size of the repayments.
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