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Record Low Interest Rates ‘To Stay’

by noor on November 11, 2009

in Banks, News

 

According to experts, it is possible that the interest rates will stay at record lows of 0.5% throughout the next year to support the recovery process in UK .

low interest

A rate hike was expected in the markets by the third quarter of 2010, with borrowing costs reaching 1.5% or greater by the end of the year. However, the banks forecast that inflation will undershoot the 2% target if this happens.

This suggests that borrowing costs will probably remain low for a long time, or the Bank can put in more efforts to enhance the money supply through its quantitative easing program, which currently stands at £200 billion.

After the Bank’s forecasts were published with interest rate rises, the pound lost more than a cent against the dollar as a result, although the forecasts are good news for those households with a tracker mortgage linked to bank rate.

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