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Rising inflation means rate cut less likely

14/05/2008

It now looks less likely that homeowners in Greater Manchester will see their mortgage rates cut next month.

New figures from the Office for National Statistics show that inflation is running at three per cent, which is one per cent above the government's target rate.

The rising cost of food and fuel means that Manchester property owners will no doubt be looking for the best mortgage offers on the market when their current fixed-rate deals expire.

Lloyds TSB's chief economist believes that the Bank of England is unlikely to slash the main lending rate in June.

In comments broadcast on Independent Radio News, Trevor Williams said: "These are shocking numbers; they are very high.

"They are higher than I thought they would be. I think they are higher than most in the markets thought they would be."

The Bank of England, which has the conflicting task of keeping down inflation while helping to maintain economic growth, held interest rates at its last meeting in early May.