Bank of England urged to drop interest rates

In December 2007 the Bank of England dropped interest rates for the first time in over two years, following a series of five interest rate hikes in the space of a year between August 2007 and July 2007. As a result of a slowdown in the economy many experts were expecting the Bank of England to cut rates again in January, but it was decided to keep the rates on hold at 5.5%.

This news came as a disappointment to many industry professional as well as homeowners waiting for a cut in repayments. The main reason for the Bank’s decision to keep rates on hold appears to be concerns about rising interest rates, which have gone above the 2% target again due to rising food and petrol prices.

Officials from the British Chambers of Commerce are now stating that even a modest interest rate cut could help to restore the slowing economy, and could also help to improve consumer confidence levels. They added that the economy was at significant risk of interest rates were not reduced.

The BCC added that it understood that the Bank of England faced a tough decision because it had to consider both the problems with the economy and the threat of rising interest rates. Many now expect the Bank of England to announce a rate cut following the February MPC meeting