/24-7PressRelease/ - LONDON, UK, May 22, 2007 - As the central bank targets to bring down the inflation rate to around 2 percent in the next two years, a further hike in interest rates seems imminent. In its quarterly Inflation Report, the Bank said risks to the Consumer Price Index rate were still on the upside, signalling that the rise in interest rate is just around the corner.
The Bank raised borrowing costs by a quarter-point to 5.5 percent earlier this month.
Philip Shaw, chief economist at Investec stated: "It does nothing to shake our view that interest rates will rise in the next few months".
A further hike in interest rate may prove costly to those borrowers who have already taken secured or unsecured loans from the lenders. However, it may be good news for those engaged in savings. Every time the base rate increases, borrowers have to cope up with the higher instalments on their loans.
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