Interest rates held at 5% May 8th, 2008
The Bank of England’s Monetary Policy Committee (MPC) has kept interest rates on hold at 5%. The decision was expected by many commentators as the MPC do not have the same aggresive approach as the US Fed. Also the threat of rising inflation, particularly on fuel and food, is every present.
However the economy is continuing to slow, with the housing sector bearing the brunt. Consequently interest rates are expected to be cut in June by 0.25% with further cuts coming over the next 12 months to take rates down to 4.25%. Good news for those with tracker mortgages, but the question whether these reductions will be passed on to fixed rate customers still remains.
