Press Release Summary: The expectations of Central bank received a terrific jolt when they were exposed to the fact that the inflation rates for the month of July, has risen more than twice than what they anticipated.
Press Release Body: London (Longdog Finance) August 25, 2008: The month of July witnessed a steep rise in the rate of inflation. The 4.4% annual inflation rate broke the record of last 11 years in the economic history of the UK. Earlier top economist had predicted a rise to only 4.1 percent.
Most of the experts feel that the chief factors that have contributed to this steep rise in the rate of inflation are the food and fuel prices. But in reality, dropping house prices and poor per capita spending are the factors that are making sure that economy goes down to a stage from where it becomes impossible to recover.
The policy framers of the reputed Bank of England, earlier did not made any changes in the rates of interest after witnessing the last week\'s inflation figures. But in near future, even they too are expected to take some harsh decisions to combat with the rising inflation rate. Michael Saunders, economist, Citigroup, said, "There is a little chance the Monetary Policy Committee will cut rates in the next few months, and indeed, there remains a near-term risk that the MPC will hike rates if inflation expectations surge higher again.\" But despite that there is a slim chance that the Bank of England will slash the rates to 4.75 percent in the month of December.
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