Experts predict interest rate freeze
Many economic experts believe that the Bank of England will keep interest rates on hold at 5.5% this week, as a result of weak retail spending figures from high street shops.
Reuters surveyed 58 economists, with 53 predicting no change in rates when the Bank’s Monetary Policy Committee meets tomorrow. The result of the meeting will be announced on Thursday.
However, most experts do predict that rates will increase again at least once this year, either in July or August.
High street sales rose 1.8% in May, compared to 2.4% in April – the lowest increase in seven months. There are also signs that the housing market is cooling, with mortgage approvals at their lowest level for 12 months.
The cold weather could be in part responsible for weak high street sales, but the four interest rate rises since last August are also believed to have played a part, and have definitely impacted on the housing market.
“The Bank should think twice before putting up rates again in the near future,” sais Kevin Hawkins, director general of the British Retail Consortium.