Interest rates must go up
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- Published:Monday, April 30th, 2007
The Bank of England must raise interest rates to 5.75% by June in order to guard against inflation, the National Institute for Economic and Social Research (NIESR) has said.
Although interest rates are expected to rise from 5.25% to 5.50% in May, the NIESR believes a further rate rise in June would in particular, curb wage driven inflation.
Should the Bank of England follow this course, many homeowners across the country will face two jumps in their mortgage repayments.
Many homeowners, especically first time buyers have already taken out new fix rate terms to safeguard them from further rate rises.
Indeed, a number of lenders have replaced older rate-favourable deals with new offers as a result of the demand for a “secure” mortgage repayment.
The Bank of England will hold its next interest rate meeting on 10 May.
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