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UK Interest Rate: 5.25%
UK
Interest Rates Forecast: Further 0.25% rise likely at
some point this year
Will
Interest Rates Rise Again in February?
With
January's surprise interest rate rise
still fresh in many people's minds, the Bank of England's
Monetary Policy Committee met again on the 2nd February
to review the data they will use to help them decide
whether to raise rates again this month or not.
Some
of the things they will consider are economic growth
– up 0.8 per cent in January, the latest data
on wage rises and of course the newest
inflation data. The outcome isn't obvious, so we've
gathered together a host of expert predictions to see
what seems most likely.
National
Institute of Economic and Social Research
NIESR
are one of Britain's longest-established economic research
groups, basing their work on statistical projections
of the UK's economy.
They
believe that at least one further rate rise
to 5.50 per cent is necessary to bring inflation back
to target, with the possibility of a third rise to 5.75
pc in the second half of this year.
In
a recent interview, NIESR senior research Ray Barrell
said that "Hopefully the January hike plus one
more (rate increase) will be enough" and added
that in NIESR's view, the Bank of England should have
raised rates by a half percent in November, rather than
just a quarter percent, as such an increase may have
reduced the need for continued rises this year.
Roger
Bootle – Economic Advisor to Deloitte
One
of the leading economics experts in the UK, Bootle believes
that one further rate rise is likely in 2007, but that
by the end of 2008 rates will have fallen back to 4.5
per cent.
Howard
Archer – Global Insight
A
senior economic analyst at consultants Global Insight,
Archer believes that, "there is a very real risk
that they will rise higher still."
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