Saving and investing news
Interest rate controversy
14 January, 2008
There has been widespread condemnation of the Monetary Policy Committee (MPC) to keep interest rates at 5.5%.
Many consumer and retail groups had called for an interest rate cut this month following poor Christmas sales, but the MPC has not voted for consecutive cuts since 2001. Also, there were fears that a rate cut would have resulted in even higher energy bills and increasing inflation.
Responding to the Bank of England’s decision to hold interest rates, David Newnes, Managing Director of Your Move estate agents, said: “The MPC should have cut rates. The economy is still reeling from the credit crunch. The property market is suffering severely - transactions have fallen and house prices are stagnating. We need resolute action - not dithering.
“The Bank of England should be acting decisively to reinstate confidence across the wider economy. The property market, consumer confidence, and the wider economy are suffering while the MPC vacillates. Instead the MPC is fiddling while Rome burns. We need to see further interest rate cuts, soon.”
Many analysts are already predicting they will go down now in February.
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