Experts tip interest rate hold

Economic experts from a variety of organisations have predicted that the base rate of interest will remain at 5.75 per cent until early 2008.

The Bank of England’s monetary policy committee is to meet on Thursday (December 6th) to decide on how to set interest rates and none of the analysts from the Royal Bank of Scotland, Lloyds TSB and the Centre for Economics and Business Research expect to see a change.

After five rises in the base rate of interest since August of last year, many British borrowers, including millions of homeowners, have been faced with higher repayment demands and heightened debt management difficulties.

Howard Archer, chief UK and European economist at Global Insight, remarked: “Well [the interest rate decision] is obviously extremely tight. We are going for no change, but we wouldn’t be surprised if they do. It’s right on the margin.”

In October, the Council of Mortgage Lenders forecast that the cost of borrowing would be reduced by a quarter-point before the end of this year and to five per cent by the end of 2008.