Interest Rates to Rise Sooner

Interest rates are expected to increase in the near future according to the rise in economic growth as predicted by the Office of the National Statistics,UK.There was 2 percent growth over the past six months, the fastest growth rate over two consecutive quarters since 2000.

The credit rating agency, Standard & Poor’s, has given AAA credit rating for UK economy.

Mr. Andrew Sentance.member, monetary policy committee of the Bank of England said that he was in favour of gradually moving interest rates up from their very low level which could be done without disrupting business or consumer confidence.

The Bank of England has been keeping interest rate at 0.5 percent since March last year. There would be little change before the end of next year, but strong economic growth has caused some traders to predict two rate rises before then and with at least 1 percent base rate by the end of 2011.

According to the figures released by the Office of the National Statistics, the Gross Domestic Product (GDP) grew by 0.8 percent between July and September.

The business houses however gave a cautious welcome to the growth figures in view of the impact of the cuts and VAT rise in the new year.Mr. David Kern, chief economist, British Chamber of Commerce said that the people had not yet seen the impact of the deficit cut.

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