You are here: cherry > Press releases for November 2010 > Comments from Nick Hopkinson, Director of PPR Estates, on today’s Bank Base Rate announcement by the Monetary Policy Committee (MPC):

04 November 2010

“After 20 months at 0.5%, the lowest Bank of England base interest rates in history have now become the norm. Given the mixed economic data and house price uncertainty that persists currently it is no surprise that the rate setters are continuing to sit on their hands. However, inflation continues to be painfully high at around 5% for the ‘man on the street’ and it will inevitably be a nasty shock to borrowers and small/medium-sized businesses (SMEs) when rates have to start going up to contain this. It’s important that we don’t forget that controlling inflation remains the primary long-term brief for the MPC. I fear many borrowers are not prepared for this. “Separately, the USA has launched a further round of Quantitative Easing (QE2) with their usual bluster, in what appears to be a desperate ‘shot in the dark’ to try and stimulate their economy. All the evidence on these high-stake experiments with tax-payer money tends to indicate that QE has done nothing to increase bank lending, that it drives up inflation and has led to new investment bubbles around the world. The MPC has decided not to go ahead with any further QE today however reviewing the minutes from this month’s meeting will give more insight into whether the likelihood of this is growing. Meanwhile, struggling households and SMEs need to prepare for higher interest rates in the future and are already experiencing higher living costs.” If you require any further information, please contact Nick on 07768 144497

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