Interest rates to hit 5.25 per cent by early next year

From: The Scotsman | Date: October 28, 2006| Author: | Copyright information

INTEREST rates will rise to 5.25 per cent early in the New Year, and are likely to remain above 5 per cent for the foreseeable future, according to Britain's longest-established independent economic research institute.

Borrowing costs should rise from their current 4.75 per cent to 5 per cent next month and to 5.25 per cent early in 2007, the National Institute for Economic and Social Research (NIESR) says in its latest quarterly Economic Review, despite inflation being expected to ease.

The Bank of England last raised rates from 4.5 to 4.75 per cent in August, its first increase in two ...

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