05-07-2007
Interest rates up to 5.75%
Interest rates rose one quarter-point further to 5.75 per cent today, the Bank of England has announced.
It has been the fifth rise since last August, making rates reach their highest level since February 2001.
The rate hike will mean the cost of borrowing will increase for businesses and consumers alike.
Indeed, the decision could badly affect consumer spending, and therefore put businesses at risk.
"It might not be too long before the monetary policy committee (MPC) follows up today's interest rate rise to 5.75 per cent with another increase," Roger Bootle, economic adviser to accounting group Deloitte, told the Times.
He believes that a further increase to six per cent might not be sufficient to curb inflation.
Although city analysts expected the decision, business groups were split over the Bank's move.
"We question whether the risks and uncertainties justify aggressive and persistent interest rate increases at the present time," BCC economic advisor David Kern, said.
While the British Chambers of Commerce criticised the MPC's move, the Institute of Directors welcomed the Bank's decision as necessary.
After a better buy-to-let mortgage? Try our rates: