Unchanged Base Rate No Surprise Says Abbey

Published: 6/10/2010

The recent decision by the Bank of England to keep the base rate at 5 percent was as per expectations according to the Abbey National.

A spokesman from the Abbey National explained that the need to manage an economy that is slowing down meant it was highly unlikely to see the interest rate increased, since that would slow it further. The rise in inflation, up to 3 percent in April also meant that a rate reduction was not going to happen since that would further fuel the inflation rate.

Looking forwards the Abbey National feel there may be a cut in the interest rate later in the year, though it needs the inflation rate to be kept under control for that to happen.