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Stable interest rates good news for UK mortgages

Date: Thu, 20 Oct 2005

Predictions that interest rates are set to be stable over the coming months will be welcome news to many UK mortgage holders.

Analysts are forecasting that interest rates are likely to remain level for a few months despite worries over inflation.

The latest minutes from of the Bank of England's last Monetary Policy Committee (MPC) meeting shows that the committee voted unanimously to keep rates at 4.5 per cent this month and barely mentioned the idea of changing the base rate.

However, some economists are not totally ruling out the risk of rates rising before the end of the year, especially if inflation continues to stay above the MPC's two per cent target.

"Today's minutes suggest that there is little chance of a rate cut this year, but if high fuel prices feed through the committee seems prepared to raise rates to avoid higher inflation," said Laura Phaff, economist at the Centre for Economics and Business Research think tank.


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