Rates still likely to rise despite today's freeze, says IoD

In taking the expected decision today to leave interest rates unchanged, the Institute of Directors (IoD) said the Bank of England is almost certainly waiting for more information about the strength of the economy. When the post Christmas economic situation becomes clearer, further rate rises will be likely over the coming months, the IoD said.

Commenting on the Bank's decision, Graeme Leach, Chief Economist at the IoD said:

"The Bank of England is keeping its powder dry until next month. Consumers and business shouldn't be deceived into thinking the interest rate outlook is flat, it is not. Interest rates are likely to rise to 4.5% by the end of this year."

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8.1.04 no.223

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