(1888PressRelease)
August 23, 2007 - The Bank of England has published its Quarterly Inflation Report, in which it was made clear that the base rate needs to hit six per cent in order to bring inflation down.
If rates stayed at their current level of 5.75 per cent, it is claimed that inflation would not be brought back down to the two per cent target set by the government.
The report looked at trying to hit this target in two years' time and a number of factors have led to the hint that rates will reach six per cent this year.
"The scope for further upwards pressure on commodity prices, the limited margin of spare capacity and the continued elevation of some measures of inflation expectations and pricing intentions mean that the balance of risks is judged to be slightly on the upside," said the report.
Property purchase expert Julian King says: "This is terrible news for tens of thousands of homeowners who have already seen the base rate increase from 4.5 per cent to 5.75 per cent in the last 12 months."
Mr King is a director of the UK's leading fast house purchasing firm, National Homebuyers. The quick sale company guarantees to make an offer to purchase any property quickly, regardless of its condition or location.
"Potential buyers will also be affected. They are likely to be further put off from entering the market for fear of being caught out by rising rates.
"Lack of buyers means it will be even more difficult for vendors to achieve a sale."
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