The base bank interest rate has stood at 0.5 percent now for nearly two years, however this prolonged relief may soon be coming to an end.
With the rate of inflation now reportedly at 4 percent and the CPI forecasting a 5 percent inflation rate by the end of the year, the pressure is growing for rates to start to increase.
The MPC has released the results of its latest meeting (10th Feb) and it looks like the divisions between members will soon result in change.
- 1 member voted for a 0.5% rate rise to stem the inflation growth risk
- 2 members voted for a 0.25% rate rise.
- The remaining members voted to keep hold of the current policy.
It is expected by most analysts for base rates to hit 1% by the end of 2011 – with the first increases seen by May.