Interest rates stick at 5.75 per cent
Published On 2 August 2007
The Bank of England's Monetary Policy Committee (MPC) has decided not to increase interest rates this month, news which will be welcomed by consumers with mortgages and other borrowings.In a statement released at 12pm today (August 2nd), the MPC said that interest rates would remain at 5.75 per cent for the month.
This means that interest rates have increased five times since August 2006.
Financial experts welcomed the MPC's decision to wait and see what the effects of earlier increases would be on consumer spending.
Trevor Williams, chief economist at Lloyds TSB, commented: "After two interest rate rises in three months, the MPC was in danger of doing too much without allowing time to assess the effect of the earlier increases.
"With around two million people likely to have to re-fix their mortgages at higher current rates, the economic impact could be quite large and negative.
"But it is still early days in the interest rate cycle, and the MPC has decided to keep rates unchanged in August while new data is released and it assesses what it means for the inflation target. This situation of 'wait and see' should persist for some months."
However, Barry Naisbitt, an economist for Abbey, said that economic data seemed to suggest that more interest rate rises could be needed to curb spending and inflation.
