Interest rate freeze expected - commercial mortgages

07 November 2007

When the monetary policy committee (MPC) of the Bank of England meets to set interest rates on Thursday it is widely expected it will maintain the price of borrowing at 5.75 per cent.

It is thought the MPC will keep the rate unchanged in an effort to keep inflation down.

Oil prices and food costs have put an upward pressure on inflation in recent weeks and months.

However, some argue an increase could be on the cards due to evidence of a slowdown in the housing market and subdued consumer confidence.

The British Retail Consortium said retail sales rose by just one per cent year-on-year in October, the weakest growth since November 2006.

UK rates have been on hold since July when they rose to 5.75 per cent from 5.5 per cent.

The majority of analysts believe the Bank will cut rates to 5.25 per cent in two stages by mid-2008 as economic growth cools.