MPC urged to hold fire on rates as inflation rises - commercial mortgages

15 July 2008

The Bank of England''s monetary policy committee (MPC) has been urged not to raise interest rates in response to the latest inflation figures.

Office for National Statistics data published today revealed that the consumer prices index (CPI) measurement of inflation rose from 3.3 per cent to 3.8 per cent last month, pushing it close to the four per cent figure the Bank''s governor Mervyn King tipped it to rise to recently.

The main contributors to the trend were food and non-alcoholic drinks, petrol, utility and leisure goods.

Fearing such a move may prompt a rise in interest rates by the MPC, the director of property portal propertyfinder.com, Nicholas Leeming argued that the economic slowdown will soon curb inflation.

He added: "It is essential for the health of the economy that the Bank continues to use a light touch to tackle inflation and does not increase base rates".

Such restraint could help prevent a rise in the cost of commercial mortgages.