Leeds bond 'moving with base rate'

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Leeds bond 'moving with base rate'

Leeds Building Society is certain that the Bank of England's monetary policy committee will increase the base rate by 0.25 per cent at its monthly meeting today.

With rates being increased to counter inflationary pressure, the group believes that many lenders will be compelled to increase the rates on their fixed-rate packages.

Karen Wint, head of marketing and PR at the building society, said that the Bank of England was not 'bluffing' and that there will certainly be an increase today.

"Market rates are currently running at such a level that any increase has already been factored in," she added.

Ms Wint also identified how base rate increases could be profitable for investors, "who benefit in a rising rate environment".

She said that the financial climate had allowed the building society to roll out a Leeds bond which pays at 6.20 per cent until June 30th 2009.

The Leeds fixed-rate bond enables 25 per cent of funds to be accessed without notice or penalty.