Retailers and businesses have breathed a sigh of relief following the Bank of England’s decision last week to hold interest rates.
The Bank of England’s Monetary Policy Committee voted to maintain the 0.5% Bank Rate meaning the interest rate has stayed constant for the past 23 months. The last change in the Bank Rate was two years ago when the Bank Rate was reduced by 0.5 percentage points to 0.5% on 5 March 2009.
However interest rates are likely to have to rise soon as the Bank seeks to cope with rising inflation, recorded at 3.7% in December, and above the Bank’s 2% target.
Retailers such as Next and John Lewis have already warned against the danger of rising mortgage rates hitting disposable income if a rise does happen whilst groups such as the British Retail Consortium have also been lobbying against a rise especially with retailers already being hit hard by rising costs across their businesses.
But although businesses and consumers may have escaped an interest rise again for this month longer term most accept the view of analysts across industry who believe some sort of rise is inevitable, with many predicting that interest rates will rise by at least 0.25% to 0.75 % later this year.