Potential rate hold bad news for personal loans
Monday, January 9, 2006
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Last month, only one member of the MPC voted for a 0.25 per cent rate cut, with the remaining eight members voting for a freeze.
Now with weak spending on the high street, slow house price growth and high oil prices, a rate cut is looking unlikely – bad news for personal loan, credit card and mortgage holders.
"Given continuing significant uncertainties over the inflation and growth outlook, we expect the MPC to remain on the sidelines in January. Indeed, it is very possible that the situation is still not clear enough for a majority within the MPC in favour of an interest rate cut to be reached in February," said Howard Archer, chief UK economist at consultancy firm Global Insight.
The BoE is due to announce the MPC's decision on Thursday January 12th and despite the daunting news for those with personal loan or other debt commitments, savers will be smiling knowing that their money is growing that little bit quicker.
Interest rates have been fixed at 4.5 per cent since August when they dropped from 4.75 per cent. Interest rates reached a peak in the early 1990s, when they stood at 15 per cent.
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