Interest rates held at 5.5%

The Bank of England’s Monetary Policy Committee voted against a further interest rate rise, keeping rates standing at 5.5%.

This will ease house builders’ fears about the possible impact a string of interest rate rises would have on the housing market.

However, the Royal Institution of Chartered Surveyors (RICS) has suggested that further may still take place before the end of the year, possibly taking interest rates to 6%.

The RICS senior economist David Stubbs, said: "The decision to hold interest rates at 5.5% is not unexpected, as inflation is likely to fall back in the coming months, and policymakers are unsure how much impact their past moves will have.

"But while further evidence of the slowing housing market is now clear for all to see, the balance of risks to inflation remains on the upside given the overall strength of the economy. This suggests at least one further rise is still on the cards. Indeed, by not raising interest rates now the Bank of England risks having to push rates to 6% by the end of the year."

« back to development finance news