The Bank of England today (March 8th) chose to hold interest rates at 5.25 per cent, a move that had been widely predicted by financial observers.
In news that will relieve those financial managers reliant on borrowed money, the Bank's monetary policy committee (MPC) voted to leave the rate unchanged but a further increase to 5.5 per cent in the next few months is on the cards.
Global Insight analyst Howard Archer predicted a further rise in April or May.
"The exact timing of the anticipated interest rate hike is likely to depend critically on the strength of economic activity and inflation data over the next few weeks as well as wage developments," he said.
"We believe that 5.5 per cent will mark the peak in interest rates as growth loses a little momentum over the coming months and inflation heads back down."
'Worsening global risks
The British Chambers of Commerce said that the MPC should think long and hard before raising the base rate further because of "worsening global risks, highlighted by the acute turmoil on the international financial markets".
According to the group, a "significant" slowdown in UK economic growth is already likely in late 2007, even without a further interest rate rise.
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