16 October, 2008

The Bank of England's planned to keep their interest rates at 5 per cent last week, which has drawn a mixed reaction from commentators.

According to the declaration made by the Bank's Monetary Policy Committee (MPC), it continues to struggle with increasing inflation rate and a downfall in general economic activity.

Many surveyors and estate agents were keeping their fingers crossed for a slash, in order to enhance the customer's confidence and assist the people with debt management by freeing up their finances.

Royal Institution of Chartered Surveyors (RICS) chief economist Simon Rubinsohn insisted that "the worsening in both business and customer emotion will validate an easing in policy later in the year".

The committee's aim is to maintain inflation around the Government's 2 per cent target, which is currently at 3.8 per cent and is expected to go high further by the end of the year.

However, it has been revealed that some analysts expected the MPC would raise their interest rates to cop with inflation, but it shows that the committee is still struggling to steer a middle path.

Engineering Employers' Federation head of economic policy Lee Hopley observed that "The MPC continues to be dragged in opposite directions due to increasing inflation and slowing growth rate. However, this critical situation can be solved by seeking out debt management plan. This plan would help you guide how to make balance between income and expenditure, in order to have a better and secured future.

"However, a slash in interest rates may be needed sooner rather than later in order to protect the economy from moving towards downturn." At such situation only debt management plan can assist to tackle with rising inflation rate.

The need for a cut is usually essential to help the people in debt and hard-pressed households cope with the increasing rate of inflation.

Mr Stevens stated that millions of people in Britain are already dipping into their savings to meet the bills and buy groceries. This situation also associated with increasing credit card debt."