Lloyds TSB: BoE to keep rates on hold

03 October 2007
The Bank of England (BoE) is likely to maintain the base rate of interest at its present level, according to one expert.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said the organisation was "almost certain" that the base rate would remain at 5.75 per cent.

Arguing that the housing market has remained "resilient" in the face of recent interest rate rises, Mr Williams said the economy appeared to be "pretty robust" so a rate cut was also unlikely.

"However, with inflation comfortably under its two per cent target, wage inflation rising slowly - at 3.5 per cent year-on-year - and continuing turbulence in the credit markets, it is equally certain there will not be a rise," he commented.

Ian Perry, a spokesman for the Royal Institution of Chartered Surveyors, recently said that potential house buyers are becoming more "cautious", choosing to wait to see how interest rates will impact upon their finances.

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