Homebuyers 'should not expect a cut in the interest rate'

By Jonathan Dawes, Fri 29 Aug 2008 - Published in Mortgages

People who are looking at taking out a home loan may be interested to hear that the Council of Mortgage Lenders (CML) believes it is unlikely there will be a cut in the interest rate until it is clear inflation will not rise any further.

A spokesperson for CML stated: "Once we get over this spike in inflation there are prospects then for perhaps more concerted action to reduce interest rates."

Currently, the interest rate stands at five per cent, after being held in August.

The most recent change to the bank rate occurred in April, when it was reduced by 0.25 per cent.

A decision on next month's rate will be announced on September 4th.

Figures supplied by the Office for National Statistics reveal that annual inflation rose from 3.8 per cent in June to 4.4 per cent in July.

This was the highest increase noted since records began over ten years ago.

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