Bank of England governor Mervyn King has hinted interest rates may rise in May, with further increases possible by the end of the year.
He says this prediction is based on bank rate increases “in line with market expectations”. Many experts have suggested a 0.5 per cent rise in rates is likely in May with further rises throughout the year.
King says three factors account for the current high level of inflation, including the January rise in VAT, the continuing consequences of the fall in sterling in late 2007 and 2008 and recent increases in commodity prices, particularly energy prices.
He says: “Although one cannot be sure, prices excluding the effects of these factors would probably have increased at a rate well below the 2 per cent inflation target.
“Inflation is likely to continue to pick up to somewhere between 4 per cent and 5 per cent over the next few months. That primarily reflects further pass through from recent increases in world commodity and energy prices.
“The MPC’s-central judgment, under the assumption that bank rate increases in line with market expectations, remains that, as the temporary effects of the factors listed above wane, inflation will fall back so that it is about as likely to be above the target as below it two to three years ahead.”
Last week, the Bank of England’s Monetary Policy Committee held base rate at 0.5 per cent for the twenty-third month in a row and held its quantitative easing programme at £200bn.
An ISA – or Individual Savings Account – is a very tax efficient way to save as
you pay no income or capital gains tax on the returns you receive. No matter
how much your investment grows and no matter how much you take out over
the years, your returns are tax free. It therefore remains one of the taxman’s
most valuable concessions to investors.
That’s why most experts agree that everyone’s first investment in each tax year
should be within an ISA and, if possible, that you should make full use of the
available allowance. Remember, once the new tax year begins on 6 April, any
unused allowance is lost forever.
ISA BENEFITS AT A GLANCE
• Shelter an investment of up to £10,200 from tax (£20,400 for a couple)
• ISA limits increase annually in line with inflation (RPI)
• You pay no capital gains tax on the returns from your ISA
• No further income tax to pay
• You don’t have to mention ISAs on your tax return
• You don’t need to hold an ISA for a fixed term
(although a Stocks and Shares ISA should be regarded as a long-term investment)
• You have complete freedom about how you use the money in your ISA. You can
take an income or make a withdrawal whenever you wish.
It’s been a while since i last posted, been very busy with exams but pleased to say just one more to pass, then i can have DIPIFA beside my name, Pensions are changing a lot just now so if you have any queries please contact me.
George Gibson Independent Financial & Mortgage Advice
My name is George Gibson. I have been giving client’s Financial Advice since 1997 and from March 2002 I have been a Financial Adviser (FA) based in Dunfermline, Fife, although I have many clients based all over the United Kingdom.
Amongst the products and services I offer are Investments, Pensions, Life Insurance, IHT planning, General Insurance & Mortgage Advice.
I offer all my clients the opportunity to get the advice and cover they need by phone, on-line or a personal visit either at your home, place of business, or in my office.
My primary aim is to provide every one of my clients, whether personal or corporate the highest standards of advice and service. I take great care in discussing their specific requirements to ensure that I match my clients to the best possible solution.
Regards George Gibson
Next year anybody not 50 years old on the 5th April will have to wait untill they are 55 to take pension plans.
Any further information please feel free to contact me on freephone 0800 612 4523
George Gibson IFA & Mortgage Advisor