Bank urged to keep interest rates low - Money - News - Moneyfacts

News

Bank urged to keep interest rates low

Bank urged to keep interest rates low

Category: Money

Updated: 06/09/2010
First Published: 06/09/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England has been told it must keep interest rates low while the economy remains fragile.

Ahead of the Monetary Policy Committee's September meeting on Thursday, David Kern, chief economist at the British Chambers of Commerce, said that despite the recent upward revision in the economy's performance in the second quarter of the 2010, there was no room for complacency.

Falling house prices and further declines in bank lending to business were highlighted as potential risks in the third quarter of the year, while it was also noted that 'worrying signs' of a slowdown in the global economy would only heighten the uncertainty in the UK.

While acknowledging that the Government's tough deficit-cutting programme was necessary to stabilise the public finances, Mr Kern said the measures of 'unprecedented severity' would inevitably increase the likelihood of an economic setback.

"To counter the dangers of a relapse, it is vital that the MPC keeps interest rates as low as possible, for as long as possible," he added.

"Any thought of tightening monetary policy must be rejected until the recovery is more secure.

"If the economy shows signs of weakness, the MPC must be ready to increase the Quantitative Easing programme above £200 billion.

"Ensuring that the recovery is sustained must be the highest priority at the present time."

The low interest rate environment has generally been good news for homeowners, many of whom have reaped the benefits as the cost of mortgages has dropped.

To see if you can get a better deal on your mortgage, take a look at our mortgage best sellers chart to see the most popular mortgage deals at present.

Alternatively, if you know exactly what type of mortgage deal you're looking for, we have best buy charts showing everything from two, three and five year fixed rate mortgages, right through to variable rate mortgages and first time buyer mortgages.

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Money worries lead to Christmas on credit

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.

Would you spend more for a character property?

We all have our own ideas of what makes a dream home, and for many, character features are at the top of the list. But how much more would you be willing to pay for those kinds of additions – and could they even help you save money in the future?

A quarter of Brits have fallen victim to a scam

Think you know how to spot a scam? It may not be as easy as you’d think, with 25% of Brits admitting that they’ve been the victim of one in the past, and a further 73% are concerned about being scammed in the future.
 
Close