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Outlook: UK interest rates

Outlook: UK interest rates

PHEW! INTEREST rates have been held again, not withstanding predictions that the Chancellor's spend, spend, spend Budget would drive them higher. Unfortunately, this is likely to be only a brief reprieve. Interest rates both in the US and Euroland are on the march, as inflationary pressures mount once more, and it seems hardly likely that the UK can resist the trend for long.

As things stand, the UK has the same short-term interest rates as the US, and if the Federal Reserve opts for another quarter point at next month's meeting of the open markets committee, they will be lower. While such a situation is not entirely without precedent, it is pretty unusual.

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