| UK
Interest Rate: 5.75%
UK
Interest Rates Forecast: Rate cuts remain unlikely before
2008
It's
the Bank of England Monetary Policy Committee's monthly
interest rate setting meeting next week - so what's likely
to happen?
Unsecured
Borrowing A Little Too Healthy At Present?
Unsecured
personal borrowing (i.e. personal loans and credit cards)
rose in September by £1.35 billion, according to
new figures this week. This is an increase of £250
million on August and suggests that Britons may be resorting
to 'easy' credit to compensate for relatively weak earnings
growth.
The
BoE Monetary Policy Committee may see this as rather too
inflationary and an indicator that the time is not yet
ripe for a cut in interest rates. Howard
Archer, of Global Insight, commented that "Significantly
higher mortgage lending and consumer borrowing in September
is not conducive to an interest rate cut".
Many
other analysts agree and do not expect to see a cut in
interest rates this side of Christmas.
Bank's
Barker Continues To Play Down Rate Cut Chances
One
of the known 'swing voters' on the Bank of England's Monetary
Policy Committee, Kate Barker has recently made a string
of comments which seem to suggest that she will not vote
for interest rate cuts in the near future.
Her
most recent statement came on a trip to the Channel Islands.
Barker said that "We [the MPC] are asking ourselves
if things are so different from August and do we actually
have to cut rates?"
These
comments, combined with economic evidence of inflationary
pressures, seem to make it very unlikely that the MPC
will vote to cut interest rates at their November meeting
on the 7th and 8th of November.
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