Interest rates “likely to rise again”

Interest rates are likely to rise again in the near future, Bank of England governor Mervyn King has warned.

He observed that a number of economic indicators – including inflation and property prices – remain worryingly high.

The news will be particularly alarming for those who are about to take out loans – particularly those with homeowner loans
and mortgages.

According to the Daily Mail, a further increase may be enough to “tip thousands of households into the red”.

The last four rate rises have been of a quarter per cent and a similar increase would take the base rate up to 5.75 per cent.

However, some analysts are predicting that the base rate will be running at six per cent before the end of the year.

It was recently revealed that inflation had breached a three per cent upper limit in March, requiring Mr King to write a letter of explanation to the chancellor.

© Adfero Ltd

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