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Rate-rise looms as inflation hits 3.1 per cent

Inflation hit 3.1 per cent in March prompting speculation of a quarter point interest rate rise next month.

The Bank of England governor Mervyn King has therefore been forced to write to the Chancellor to explain why CPI inflation is over a percentage point above the 2 per cent target.

In the letter, King says that a possible interest rate rise from the current 5.25 per cent level will be considered when the Monetary Policy Committee meets in May.

Abbey chief economist Barry Naisbitt says: “Today’s figures on inflation were an unpleasant surprise. Financial markets have now firmed up their view of another base rate rise next month. The Bank of England’s Inflation Report next month will be critical in informing markets of the extent to which the bank still expects inflation to fall in the second half of this year after today’s unexpected figure.”

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A&L brings out new specialist deals

Alliance & Leicester has updated its range of specialist mortgages with the new range available from today.It includes a buy-to-let two-year tracker at base rate minus 0.16 per cent with a maximum loan-to-value of 85 per cent and a £1,999 arrangement fee. There is a buy-to-Let two-year fix at 5.39 per cent with maximum 75 […]

Beyond the hype

So much for the pessimism of a number of commentators who, like me, have been warning of a potential setback in share prices. Last week saw the UK market continue its upward progression and break through 6,400 for the first time in more six years.

Woodford dominates Isa sales

Equity income takes lion’s share of business on platforms but property funds continue to make strong showing.

Value remains within European equities

By Rob Burnett, Neptune European Opportunities Fund

In recent months, investors have become more pessimistic about both the European and the US economic outlook and yet stockmarkets have pushed on to new highs. Some would argue that this is a worrying divergence. We would take the opposite view. This appears to be classic bull market behaviour. A wall of worry has been rebuilt, and stockmarket resilience should be taken as a sign of strength. The market is discounting an improving economic outlook ahead, particularly in the south of Europe.

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