Interest rates left unchanged at 4.75%

7 September 2006

Your mortgage repayments should stay the same next month – as the Bank of England has left interest rates unchanged at 4.75%, following the latest meeting of its rate-setting committee.

Analysts had predicted there’d be no change, after last month’s unexpected rate rise. However, most experts believe there’ll be a further increase in rates before the end of the year. In August, the Bank raised the cost of borrowing for the first time in two years; to 4.75% from 4.5% – in an attempt to bring inflation in line with the Government’s 2% target. (Inflation is currently running at around 2.4%.)

Economists say that any further rise will depend on consumer spending and the strength of the housing market.

Howard Archer, who’s an analyst at Global Insight, said: “The interest rate hike in Auust was partly pre-emptive, and the Bank has indicated that it does not have a pre-determined timetable over the extent and timing of any future interest hikes.”

He said: “We currently forecast another rise of 0.25% to 0.5% in November – but we then expect interest rates to remain at that level for some time.”