Investment and Business News suggests current account interest rates will stay low

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Investment and Business News suggests current account interest rates will stay low

Fri 31st Dec 2010

A finance expert from Investment and Business News has claimed interest rates should stay low, as an increase would not help consumers deal with overly high inflation figures.

Michael Baxter, editor of the online resource, noted that the question of whether to raise the base rate to react to inflation is irrelevant.

He explained that people will simply be worse off if commodity prices are high and so are interest rates.

In his view, the current low level of inflationary pressure suggests interest rates should stay down, but he pointed out that the economic situation in Ireland may have an unwanted impact.

"If markets start questioning whether or not government debt is safe and if there is a history of the government defaulting, then that could push interest rates and markets up," said Mr Baxter.

A poll carried out by Reuters this month showed the base rate is unlikely to be raised until October 2011.

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