4 September 2008
The majority of economists expect the Bank of England to leave the base rate unchanged today, meaning secured loan customers are unlikely to see any reduction in their repayments. Economic difficulties have prompted some analysts to warn of a recession in the UK, but soaring inflation is still causing concern. This means the monetary policy committee (MPC) will be reluctant to cut rates before they can be confident that price growth is moderating. "Lingering upside risks to inflation are likely to keep interest rates on hold in September," Capital Economics analyst Vicky Redwood told AFP. David Page from Investec Securities told the news agency that he expects the MPC to leave the base rate unchanged until early next year. The consumer price index of inflation is currently running at 4.4%, but Mr Page said he expects this to rise above 5% this month. At present, the Bank of England base rate stands at 5% and has remained unchanged since March when a quarter percentage point decrease was announced.
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