- 17
- Apr
The announcement that inflation has risen above three per cent has led a number of analysts to predict that interest rates will increase next month, it has been revealed.
Earlier today, the Bank of England reported inflation had increased to 3.1 per cent over the course of March, the highest figure noted since records began in 1997.
As a result interest rates, which have been held at 5.25 per cent since January, are forecast to increase in May, a move which could put increased pressure on those making secured loan repayments.
Economist for Royal London Asset Management Ian Kernohan claimed: "Interest rates will rise in May and the market is now pricing in at least one further rise this year."
Global Insight chief UK and European economist Howard Archer commented: "This is a thoroughly nasty set of data that essentially guarantees that the Bank of England will raise interest rates by a further 25 basis points to 5.5 per cent in May."
A Guardian report suggested that a rise in interest rates could add some £15 a month to an average £100,000 25-year variable rate mortgage.
Earlier this week, a number of economists suggested that those looking to take out a cheap personal loan should act quickly ahead of the Bank’s meeting in May as interest rates are likely to rise over the summer months.
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