30-11-2007
Bank of England announces concerns over inflation
News by Adfero for Simply Business - independent providers of business insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
The governor of the Bank of England Mervyn King has announced fresh concerns over the UK's rate of inflation.
Mr King has announced that despite new data showing that the UK's housing market is at risk of a significant downturn, inflationary pressures still represent a risk to the economy.
Presently, the UK's current rate of inflation is 0.1 per cent above the Bank of England's target of two per cent and analysts are split over the direction that interest rates will take when the Bank's monetary policy committee meets on December 6th.
"We're trying to balance the risks to inflation with the downside risk if activity slows sharply," said Mr King.
"The committee's current judgment is that the most likely outcome is for output growth to slow and inflation to rise, at least for a period," he added.
Currently, interest rates are set at 5.75 per cent, at a time when data released by the Bank of England highlights that mortgage approvals have shrunk to a level last seen in 2005.