'Predictable decision' from the Bank of England

By Jonathan Dawes, Fri 8 Aug 2008 - Published in Mortgages

The decision by the Bank of England to keep the interest rate at five per cent has not come as a surprise to many people, the Fair Investment Company claims.

Director James Caldwell says the monetary policy committee had very little choice given the current situation, with rising inflation posing a threat to the economy on one side and people struggling to pay their bills on the other.

He claims as the number of repossessions increases many people would probably have welcomed a cut in the base rate.

Mr Caldwell added: "For the same reason, an increase of the base rate could have proved disastrous for mortgage holders already beginning to struggle with the pressures of the credit crunch."

In other financial news, Prudential claims the rising day-to-day expenses in the UK has resulted in people contributing less to their retirement pots as they focus on the here and now.

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