Festive interest rates rise unlikely

A further interest rate rise over the Christmas and New Year period is unlikely, mortgage firm John Charcol has claimed.

The Bank of England's Monetary Policy Committee (MPC) raises and lowers the underlying cost of borrowing in the UK in an attempt to keep inflation close to the government target of two per cent.

This year has seen two interest rate rises so far, one in August and one in November, both of which have had knock-on effects for borrowers with many personal and secured loan lenders raising their interest rates accordingly.

The next month when there was a risk of rates going up would be February, but even then the jury was very much out and it would depend what else happened, he said.

The housing market is traditionally used as an indicator of likely levels of inflation, but Christmas was always a slow period so it would be difficult to gauge an impression of the impact that interest rate changes have had, Mr Boulger said.

The release of the minutes from the MPC's last meeting, when they decided to raise rates to five per cent, has revealed that two members of the nine-strong committee voted against the rise, weakening expectations that rates will rise again in coming months.