Mervyn King hints at May interest rate rise

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.

Welcome to George Gibson Financial Adviser

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