The Bank of England has held its key lending rate at five per cent for the fourth month in a row.
Rate setters inside the bank believe that consumer prices inflation will remain high for some months to come.
It is currently at 3.8 per cent, way above the official target of two per cent. The previous change in the Bank's base rate was a reduction of 0.25 percentage points in April.
Recent falls in the oil prices and a slowdown in residential property growth are two reasons why the Bank may cut rates at the end of the year or in next January.
Howard Archer, chief analyst at the Global Insight consultancy, said the Bank is likely to keep interest rates unchanged for a few more months.
"But I do expect the next move to be ultimately downwards," he added.
A rate reduction would be particularly good news for
first time buyers who may have been deterred from applying for mortgages.
See Also: Property News (2564)
Date Published: 07 August 2008
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