Rates to stay low until 2011

12/10/2009

Further speculation over future changes in Bank of England interest rates has been made in a new report.

According to the Centre for Economics and Business Research (CEBR), policymakers will keep rates at their present all-time low of 0.5 per cent until 2011.

The experts also suggested that the rate would only reach two per cent in five years' time.

By way of comparison, the Bank of England's lending rate was at over five per cent last year.

However, the policymakers then embarked on a programme of unprecedented rate cuts, in order to boost lending flows around the economy and take away the worst effects of the credit crunch.

At 0.5 per cent, the rate is at its lowest level in the Bank's 300-year history.

One of the main arguments against keeping interest rates very low over a long period of time is that it stokes up inflation.

However, CEBR suggested that the downwards pressure on asset prices caused by the credit crisis would be severe enough to allow the low rates to continue over the long term.

Tags; Current UK Economy, Young Family Finances, Retirement Money Problems, Recent Graduate Debt,

• Share
• 
• 
• Store
• 
• Follow
•