Interest rate speculation rising, says savings accounts provider Santander

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Interest rate speculation rising, says savings accounts provider Santander

Mon 9th Aug 2010

Santander has said that the Bank of England base rate may be on the move upwards soon.

After nearly 18 months of a static Bank of England base rate, experts are starting to consider when interest will begin rising again.

According to Santander, the fact that the rate has been kept at 0.5 per cent for so long has caused a natural anticipation of an imminent increase and Monetary Policy Committee (MPC) meeting minutes could back this up.

The banking giant suggested that in recent gatherings, one MPC member had expressed a desire to raise the rate, which could mean that opinions are beginning to change within the Bank of England.

Chief economist at Santander, Barry Naisbitt, said that watching the economic data over the next few months "will be more crucial than ever for the MPC in the months ahead, as it judges for how much longer it needs to keep its foot right down on the accelerator pedal."

The Confederation of British Industry recently commented that views among MPC members have become more divergent in recent months due to concerns about the strength of the economy.

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