The Bank of England decided to hold rates at 0.5% as expected. However, the city is generally of the view that a rise is likely in the summer. Given the warm weather here in London today, there was the slight chance that summer had come early, but fortunately borrowers have been given respite for a further month. It is likely that a rise will occur in June or July, but inflation figures whilst being somewhat alarming will improve naturally simply by mathematical inevitability. There is no real need for rates to rise at this point and whatever may be said in public, the truth is that a little inflation reduces debt and improves UK plc.
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