November interest rates rise - commercial mortgages

17 October 2006

Despite inflation falling during September, experts are predicting that the Bank of England (BoE) will still choose to raise interest rates next month, which could have an effect on the market for people with commercial mortgages.

The Office of National Statistics (ONS) announced that consumer price index (CPI) inflation fell by 0.1 per cent to 2.4 per cent in September, but is unlikely to prevent further interest rate rises.

Figures published by the ONS indicate that the largest "upward effect" on the CPI rate was from furniture, major appliances and electrical goods, while the falling price of petrol helped to reduce the rate.

Commenting on the current economic conditions within the UK, Howard Archer, chief economist at Global Insight, says: "We expect the BoE to enact a further 0.25 per cent precautionary interest rate hike in November."

The BoE's monetary police committee voted to maintain interest rates 4.75 per cent earlier in the month, having raised them by 0.25 per cent in August.