Interest Rates On Hold

The Bank of England has, as predicted on Monday, announced that it will hold interest rates this month, following last month's rate cut to 5%. There was intenst pressure for the rate to be cut another 0.25% to 4.75%, but the monetary committee were concerned over the threat of rising inflation.

Whereas this is good news for savers, householders with mortgages will be disappointed that there is not another potential cut in their repayments.

At the same time, the European Central Bank kept interest rates at 4% to counter its worries about inflation on the Continent.

Experts are predicting a cut next month, with mixed views as to har far the cuts will continue this year - possibly taking the base rate down to 4.5% or even 4% by the end of the year, with the most optomistic expecting further cuts to 3.75% over the next 9 months.