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No Rise In Interest Rates of personal loans
29/10/2007
In August the Bank of England’s Monetary Policy Committee (MPC) voted to hold UK interest rates at 5.75%, the level set the
month before. The 5.75% rate was the highest since March 2001 and represented the fifth rise in twelve months, having taken
the base rate from 4.5% last August.
Minutes from the meeting in August 2007 showed that the MPC voted 9-0 to hold rates, saying that members “had no firm view”
on whether rates needed to rise further to keep inflation under control. Until recently most experts were tipping a further rise to 6% - sooner rather than later. However, stock markets have been in
turmoil in response to credit and debt fears, sparked by the collapse in the US sub-prime market in which funds have become
worthless and other institutions have borrowed against these funds. This caused more than a 10% fall in the FTSE 100 index in
just a few days. That was the first sign that maybe interest rates would have to stay at 5.75%. This week’s inflation news
has provided another. The Consumer prices Index (CPI) was down to 1.9% in July – below the government’s stated target of 2%.
Since the MPC looks to get inflation as close to 2% as possible, it may be running out of reasons to hike the rate again.
Source:-
ukpersonalloanstore.co.uk/news/200708/no-rise-interest-rates.html
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