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16 November 2006
Interest rates will be raised just once in 2007, analysts have predicted, after the Bank of England gave an optimistic forecast about the prospects of a fall in inflation.
The prediction came from the city, where Gilts were expected to rise and the pound fall against the Euro following the Bank's statement that it felt inflation would come under control in 2007, Bloomberg reports.
After the monetary policy committee raised rates last week, it issued a statement saying: "It is likely that inflation will rise further above the target in the near term, but then fall back as energy and import price inflation abate."
Writing in This is Money, Dan Atkinson of the Mail on Sunday said that inflation would make a further rate rise in early 2007 likely, mainly due to high wage settlements over the winter period as a reaction to rising prices.
If you're concerned about the effect that interest rates may have on your credit commitments order your credit report and find out where you stand financially.
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