Interest rates steady

INTEREST RATES are to remain unchanged at 4.75%, the Bank of England‘s Monetary Policy Committee announced yesterday (Nov 4).

The Bank last raised rates in August, following five rises since November last year, but today‘s decision was widely expected as economic growth and manufacturing output slowed.

Coupled with this, a recent survey by estate agent Halifax showed house prices declined fractionally in October, as previous rate rises started to bite.

Tim Porter, agriculture director at Lloyds TSB, said stability in interest rates and the cost of borrowing was welcome news for agriculture.

“Whilst certain determining factors point towards favourable conditions for lower interest rates, people would be wise to bear in mind that this does not necessarily signal a base rate cut in the near future,” said Mr Porter.

The result of the US presidential election had caused an upturn in business and financial confidence, said Mr Porter. “Stock markets in the US and the UK have responded positively but we‘ve yet to see the long-term impact.”

The decision to hold rates was helpful news for farmers, given weak grain values and static milk prices, he added.