Bank of England Poised To Make Interest Rate Decision

By Stewart Douglas

The Bank of England are expected to announce their decision on interest rates later on this week, which affect the price of borrowing money on many mortgages and commercial loans.

The UK central bank, which has control over determining monetary policy in conjunction with the UK government, is expected to publicly announce its policy over the next month on Thursday - the same day news from the European Central Bank is anticipated.

It comes at a time when UK interest rates have seen several consecutive months of increases to curb inflation and prevent further strengthening of the currency against foreign exchanges.

After almost a decade of economic prosperity and growth, analyst fear the UK economy could be in trouble of overheating, and with inflationary pressures mounting, interest rates have the been the first indicator to rise.

The rising interest rates have led to slower growth in housing sales, where the UK has experienced rapid growth in price and demand over the last decade as a result of increasing economic growth.

With consecutive interest rate rises, many homeowners have felt the impact of more expensive mortgage repayments, as compared to the easy credit days of last year.

Additionally experts expect the higher interest rates to have a knock-on effect on consumer spending, which should be sufficient to keep inflation at bay for the time being.

The Bank of England is not expected to increase interest rates on Thursday, after a series of damp results from economic surveys over the last few weeks indicate the current interest rates are having the desired effect.

With house prices growing by a mere 0.1% over the last month, and the impact of widespread flooding throughout England, it is unlikely that consumer spending will increase too significantly, underlining the proposition that interest rates at present are aligned suitably within the UK economy.