says BCC

May Interest Rate Rise “a risky move”, says BCC

Increasing interest rates too soon would put pressure on businesses and individuals, the British Chambers of Commerce (BCC) has warned, after inflation rates rose again in January. The UK Consumer Prices Index (CPI) annual inflation rate reached 4% last month, up from 3.7% in December, partly due to the VAT rise and the continued increase in crude oil prices. Economists estimate that the base rate may now rise as soon as May. The Bank of England opted again this month to maintain rates at 0.5% – after a record 23 months without change. BCC chief economist, David Kern, said that if the fragile UK economy shows signs of weakening, any interest rate rise should be delayed. “Due to the inflation rise, it now looks as though the Bank of England will put up interest rates in the second quarter. ... »