Investment Property News - Bueno Investments Limited

Bank ‘Set To Hold Interest Rates’

An economist claims it is “unlikely” that the Bank of England will cut interest rates this week because it remains concerned over inflation.

Philip Shaw, from Investec Securities, believes that the Bank’s Monetary Policy Committee (MPC) will leave the official cost of borrowing at 5.25% as it tries to tackle rising costs.

Fears over inflation came to the fore last week when both oil and wheat prices reached new record levels, threatening to further inflate the UK’s all important cost of living index.

Last month, rising petrol and food prices were blamed for the increase in the official rate of inflation to 2.2%, and there are fears the figure for March could rise even further as recent gas and electricity price hikes kick in.

Mr Shaw said: “A back-to-back cut in rates looks very unlikely at this week’s meeting and we expect the Bank rate to remain at 5.25%.

“Inflation developments have worsened over the past few weeks, having been aggravated by oil and wheat prices, plus a further weakening in sterling.”

Back To Main News Menu