No change to interest rates this month
The Bank of England has announced that there will be no rise in interest rates this month following the Monetary Policy Committee meeting. Interest rates have gone up five times in the past year by 0.25% each time taking the rate from 4.5% last August to 5.75% in July.
However, homeowners on variable rate mortgages will be relieved to know that the interest rate will remain stable on 5.75% for now. This had already been widely predicted by analysts, although most predict that there will be a further interest rate rise to at least 6% before the end of the year.
Inflation levels are still above the government's target, which is why many are predicting that there will be a further interest rate rise in order to bring inflation under control.
One analyst stated: "For now we look for a September rate rise with the growing threat of a further move around the turn of the year."
However, other experts feel that the peak of the rises has been reached, with one economist stating: "Our forecast remains that the peak in rates has been reached."
Although the hold on interest rates may only be a temporary reprieve, many homeowners will be relieved, as it gives them some breathing space to try and get to grips with the last interest rate rise, which was applied only last month. The five rises so far have impacted hugely on repayments for those with larger mortgages, and many could find themselves tipped over the edge financially if and when another interest rate rise is applied.
One homeowner in the Midlands stated: "If there had been another rate rise this month I really don’t know what I would have done. I know that there could still be another rise around the corner, but at least I can rest easy for at least another month or so."
7th August 2007
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