Interest rates 'shouldn't change'
Brits considering taking out finance for a bespoke lean-to conservatory or other home improvement may be interested in the comments of a leading economist.
According to BNP Paribas expert Alan Clarke, the Bank of England's Monetary Policy Committee (MPC) is unlikely to raise interest rates when it meets on Monday (May 10th).
Speculation is mounting that the base rate could be raised from its 0.5 per cent level for the first time in more than a year.
Office for National Statistics data released last month showed that CPI inflation reached 3.4 per cent, which is above the government's target.
Despite this, Mr Clarke suggested that the MPC will not make a move until the election's impact on fiscal policy becomes clear.
"They won't know what the precise change in fiscal policy is going to be depending on which government [gets in] and they will do absolutely nothing," he predicted.
The expert added that the earliest time for change is likely to be August, which is when the next inflation report is released.
Mr Clarke said that less government spending and higher taxes could leave the door open for more quantitative easing and that the MPC is likely to monitor the situation further before making any rash decisions.
Posted by Cheryl Stevenson
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