Good News for Tracker/Variable Rate Mortgages

BoE Hint Interest Rate Staying Low

The Bank of England Governor, Mervyn King, has said that he is more concerned about the strength of the recovery than inflationary pressures and suggests he thinks that interest rates should stay low for the forseeable future.  These comments were made in front of the House of Commons Treasury Select Committee

Questioned further, Mr King could not be confident that growth was here to stay after last quarters 1.1% jump.

Bank Governor King said there was no need to stop rising growth or slow inflation. He said: "The debate is about the appropriate degree of stimulus, not about applying brakes."

The minutes from the latest meeting of the Bank's Monetary Policy Committee (MPC), which sets interest rates, showed only one member in the eight (at present, soon to be 9) voted to raise rates from their current level of 0.5%.

This was similar to a report from the National Institute for Economic and Social Research (NIESR).

NIESR thinks growth will not pick up over 2010, leaving annual growth at 1.2% because of Government spending cuts.