MPC keeps interest rates at 4%

Link: E&Y predicts fraud increase after rate rise

Roger Bootle, Deloitte’s economic adviser, has warned that the interest rate could well rise to 4.5% in the not-too-distant future as consumer spending and house prices continue to rise. It had been hoped that past rises would dampen both these factors, but so far they have had little effect, as the economy continues to grow.

Bootle said that although the market expects rates to rise as high as 5%, this is likely to be tempered by the increasing influence of the rising sterling exchange rate and the cautious approach by the MPC over the effects rises may have on the highly-indebted.

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