subject: Dont Put Interest Rates Up [print this page] Dont Put Interest Rates Up Dont Put Interest Rates Up
Interest rates could be put up in May meaning mortgage repayments would rise, said an influential business group.
But the British Chambers of Commerce has urged Bank of England governor Mervyn King to resist putting rates up.
It argues that the economic recovery is still wobbly and that growth will be lower than predicted and unemployment higher.
The group believes that interest rates would end the year at 1.25 per cent and by the end of 2012 would have risen another per cent.
This would be a blow to mortgage holders who would see their repayments rise too.
The chamber also said that unemployment would be higher in early 2012 than the 2.6 million predicted.
David Kern, from the British Chambers of Commerce, said: "While a new recession can be avoided, economic policy must focus on limiting the risks of a new major setback.
"Despite concerns around inflation, it is important for the UK to maintain an expansionary monetary policy with very low official interest rates until later in the year."
Max Erskine from remortgagenow.co said: "I would endorse what the chamber has said.
"To keep the interest rates down will hurt savers but benefit not only those with a mortgage but also those trying to get on the property ladder.
"It is crucial to get the property market going forward as that will give a major boost to the general economy.
"When the economy's recovery is certain then an interest rate rise to help savers and combat inflation will be the right move.
"When theat time will be is not easy to predict, but I would suggest some time in 2012."
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