| UK
Interest Rate: 5.00%
UK
Interest Rates Forecast: Further increases fairly unlikely
in next six months
MPC
Divided Over November Interest Rate Increase
Although
the Bank of England's decision to increase
the base rate in November was widely thought to be a
foregone conclusion, it seems the Bank's Monetary Policy
Committee were not all in favour of the increase.
Deputy
Governor Rachel Lomax, who is responsible for monetary
policy, voted against the increase, as did one other
MPC member. The recently-published minutes of the MPC's
November meeting reveal that Lomax considered it unnecessary
to take any further action against inflation at this
time, and was concerned that rising unemployment could
lead the Bank to consider dropping rates again in 2007.
This
information has altered the balance of opinion amongst
analysts who were predicting a further rise
to 5.25% in February. It is now looking more likely
that rates will remain unchanged at
5% in February, subject to inflation and unemployment
remaining fairly stable.
29
Mortgage Lenders Have Now Increased Rates
29
mortgage lenders have increased their
standard variable rate of interest
in the wake of the November rise in the Bank of England's
base rate. A survey by price comparison
service Moneyfacts showed that almost all lenders had
passed on the full 0.25%, with only two limiting their
increase to 0.24%.
Moneyfacts
also suggested that several more lenders were set to
increase rates, including some of the
larger lenders who have not yet reacted to the change
in the Bank of England's base rate.
NSI
Puts Up Interest Rates
National
Savings & Investments have increased the
interest rates on their savings products by
up to 0.25%. The prize fund for Premium Bonds will also
be increased from January 2007 and will offer an effective
interest rate of 3.40% tax-free.
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