Bank of England's interest rate decision 'not unexpected'

Responding to Bank of England's decision to leave interest rates unchanged at five per cent, financial advice site fool.co.uk has said that the move was 'not unexpected'.

The site made the comment in light of the fact that the threat of a slowdown in the economy had not abated and rising inflation had left them with "little room to manoeuvre".

David Kuo, head of personal finance at fool.co.uk, said: "The Bank of England has sent a clear signal that it intends to bear down on the fastest rise in the rate of inflation for over a decade."

He explained that while the Central Bank may want to respond to the drop in house prices, it cannot ignore the rising cost of living.

Mr Kuo warned that as "tax cuts and interest rate reductions are strange bedfellows," homeowners should not "bank on a rate cut".

Instead, he said homeowners with tracker mortgages should look to increase their monthly payments.

UK Property News posted on 05/09/2008 18:23:07