Interest rates 'will remain unchanged'

By Sarah Engle, Thu 29 May 2008 - Published in Banking

Interest rates are likely to be kept the same at the next Bank of England meeting, an expert has argued.

Chief UK and European economist at economic research firm Global Insight Howard Archer said the Bank will be treading very carefully with regards to interest rates for the time being.

"The Bank of England seems certain to keep interest rates unchanged at five per cent next Thursday," he said.

Mr Archer added that inflation could be set to hit some four per cent during the summer months and firms are continuing to look to raise their prices to support margins.

Indeed, inflation expectations are continuing to rise, partly as a result of elevated input costs, he said.

But looking ahead, Mr Archer stated that interest rates may eventually fall to four per cent over the course of 2009.

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