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Base rate increase could damage recovery, says Ernst & Young

An increase in base rate could endanger economic recovery in what will be a difficult year for the economy, according to the Ernst & Young ITEM club.

The economic forecaster has called on the Bank of England to “hold its nerve” and stand firm against pressure to raise interest rates from a record-low of 0.5 per cent.

It says the current high level of the consumer price index, the method used to measure inflation, is largely down to VAT and commodity price increases, and says it expects the CPI to fall back to the 2 per cent target when these temporary influences finish.

The ITEM Club’s forecast shows the economy growing by 2.3 per cent this year, recovering to 2.8 per cent in 2012. Recovery, it says, will be led by a resurgent manufacturing sector taking advantage of both a low pound and the rapid growth of emerging economies to increase exports.

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Malone call to treat FTB credit scores individually

PMS executive chairman John Malone says credit-score criteria punishes first-time buyers and has called on lenders to consider applications from FTBs on an individual basis. Malone is looking to work with four of the main highstreet lenders on the issue in the coming weeks. He says FTBs tend to share similar characteristics, such as not […]

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. No, stop subsidising borrowers and give savers a break. the problem is the availability of credit not the price of it.

  2. KEEP IT LOW!!!

  3. Anonymously Anonymous 19th January 2011 at 1:37 pm

    Anonymous 1 – a borrower.
    Anonymous 2 – a saver.

    Me? A worried home-owner surfing the wave of fixed rate mortgage deal which has turned into a plum tracker since the deal period finished.

    Now where was the number of that independent advisor?

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