Interest rates will continue at low levels for a substantial length of time, according to one investment company.
Threadneedle’s head of government bonds Quentin Fitzsimmons suggested that the low loans rates seen over the last few months could continue in the long term due to the ongoing economic problems.
The Bank of England’s base interest rate, which is an influencing factor in interest rates charged on loans, is currently set at 0.5 per cent, the lowest point in the institution’s long history.
It reached the level in March following a series of reductions and the Monetary Policy Committee has voted unanimously to keep it at 0.5 per cent ever since.
“Interest rates will remain low for a considerable period and quantitative easing will be required [for] some time to come,” Threadneedle forecasted.
In addition, the organisation believes that there is no real danger of inflation, but rather a “high” risk of deflation.
By Chris Trimble