/24-7PressRelease/ - LONDON, UK, March 15, 2007 - Chief economist at New Star Asset Management, Simon Ward opines that the decision by the Bank of England's monetary policy committee (MPC) to keep interest rates at 5.25 per cent is "widely expected". He also suggested that the decision whether to raise or freeze the rate would have been close.
A change in interest rate generally brings about a change in loan and mortgage industry. Higher interest rates usually boost up the finance of those with savings accounts. But personal loan borrowers and mortgage holders without fixed-rate products got increased repayments to make.
While commenting on future rate rises, Mr Ward remarked that they remain of the view that a cooling economy and better inflation figures would head off another rate increase, but it was too soon to sound the all-clear.
It is suggested by Barry Naisbitt, chief economist at financial services provider Abbey that the majority of MPC members were waiting to establish what the effects of the last rate rise are.
He also said that in addition, the MPC would have weighed up the latest economic news and its implication for inflation. He also added that the two MPC members who had voted to raise rates in February would probably have done so again.
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