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Article: Interest rates due to hold until May

Article from:
Scotland on Sunday
Article date:
March 5, 2000
Author:
Copyright

INTEREST rates are strongly tipped to remain on hold this week as the Bank of England's monetary policy committee frets over the effect of the buoyant pound on exporters.

Comments on sterling's strength from Bank governor Eddie George and MPC member David Clementi have convinced most economists that the basic cost of borrowing will remain at 6%.

Strong demand for labour, sharply rising earnings, soaring high street sales and localised leaps in house prices are still sending warning signals to the UK's monetary policy makers.

However, earnings are distorted by a number of factors: bonus payments, prices on the high street are falling, inflation remains

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