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UK interest rates kept at 0.5%
14 June 2011
The Bank of England has announced that UK interest rates will be kept at 0.5% for the 27th month in a row.
The decision was expected due to recent concerns about the strength of the UK’s economy. However, the rate of inflation is still rising, it was 4.5% in April, up from 4% in March. The Bank of England's target inflation rate is 2%. One of the chief concerns was of course that if there was an interest rate rise, although it might tackle inflation, it would also have the effect of making people struggle with their mortgage repayments and thereby increase repossessions.
The BBC News website reports that leading economists say policymakers have a difficult decision to make do they "keep rates on hold to help the economy, or raise them to cool inflation"?
Low interest rates mean small returns for savers but borrowers, particularly homeowners and small businesses, are benefitting from low repayments.
If you need assistance with your business or are thinking of buying or selling a property, contact the Business Services team or the Property team today.
Chloe Newton, Solicitor and Andrew Petchey, Partner
