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No Change in Interest Rates
Condition of Britons is getting worse with an increase in the rate of interest.
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July 11, 2008 (FPRC) -- The inflation rate is running at the fastest pace in the last three years. On Thursday, it is expected to hold interest rates at 5.0 percent and will likely sit tight until it has a better idea in regard to greater evil, surging inflation or slowing economic growth.
In contrast, the European Central Bank has already raised borrowing costs to counter the global inflation threat. The British policymakers are not surprised, even if the inflation rate spikes above 4 percent in tis current year, as they are to keep inflation at 2 percent.
Due to the possibilities of the inflation, the financial or lending institutions are not planning to bring down the interest rates at any cost. Economics spokesman, Adam Lent said “We are at a dangerous point when businesses are starting to act like a recession is due, at the Trades Union Congress”. As a matter of fact, this behaviour risks creating serious problems at various economic reality. The housing market is moving downwards, stock markets are rolling, firms are laying off thousands of workers. The surveys indicate the economy is shrinking with each passing day. Britons are in danger of talking themselves into a recession period.
Furthermore he added, "A rise in interest rates would be catastrophic. This hold would do little to calm nerves. The Monetary Policy Committee needs to send clear message that it is doing all it can to ease the credit crises by cutting rates”.
The economy in the UK is undoubtedly slowing down. This condition is being getting worse by forces such as global oil and food prices.
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