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Interest rates to remain low
Following the recent emergency Budget, the Bank of England have continued to keep the base rate at its low level due to the austerity measures that were announced according to Andy Cuthbert, Managing Director of dot financial services.
He comments: “As the first decision since the Budget there was only going to be one outcome as many of the Chancellors measures are still yet to have an impact. In his first Budget, George Osborne said that inflation will fall to 2.7% by the end of the year but this is without having seen the effect that the rise in VAT and huge public sector cuts will have. Done in a bid to reduce the public debt, there is a need to keep interest rates low in order to support this. In addition to this there is also the impending increase in unemployment levels and the uncertainty over the financial stability in the eurozone to consider therefore an interest rate rise now or in the near future would be premature. With all that lays ahead the country’s recovery remains fragile and the Government needs to sustain stability in the market by holding interest rates. I predict that we will continue to see low interest rates, certainly in the short term.”
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