Interest rates stick at 5.5 per cent
Published On 7 June 2007
The Bank of England's Monetary Policy Committee (MPC) has decided to keep interest rates at 5.5 per cent this month.Earlier today (June 7th) the committee reached the decision, which will be good news for people with variable-rate mortgages and high levels of borrowing.
Last month, the MPC increased interest rates for the fourth time since August 2006 and some experts feared that another rise would be agreed on today in an effort to curb spending and inflation in the economy.
However, the fact that recent data from the Office for National Statistics (ONS) showed that consumer price index inflation fell to 2.8 per cent in April is thought to have influenced the MPC to delay a further rate rise.
Industry experts welcomed the decision. Trevor Williams, the chief economist at Lloyds TSB Corporate Markets, commented: "We may well see a rate rise before the summer is out, but a move this month was highly unlikely. We've seen rates increased four times since August last year and the effects of these are only just starting to show through.
"It's still too early to judge the full impact of these cumulative increases, especially those that have taken place in the past nine months.
"By holding rates the MPC has bought time to gauge the impact of recent increases, before deciding whether or not it needs to make another move."
