Interest rates to 'rise soon'

15-Mar-2007

Interest rates could soon increase to 5.5 per cent, experts suggest, which may be of interest to would-be first time buyers.

According to the Confederation of Business Industry (CBI), although the UK's current rate of inflation could fall to 1.6 per cent in 2008, an interest rate rise to 5.5 per cent is expected "soon" - which could cause concern to prospective first time buyers worried about affordability - reports the BBC.

The CBI believes that interest rates will hold at this level during 2008.

"Business prefers lower rates but also appreciates even more that they peak at a relatively low level and perhaps stay there, rather than continue to rise for lack of initial action," said Ian McCafferty, chief economic adviser for the CBI.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

In related economic news, the CBI has predicted economic growth of 2.9 per cent during 2007.

The CBI is a UK-based lobbying organisation for Britain's business community.

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