Today's Bank of England expectations

The Bank of England meets today to decide where they are going with interest rates this month; the expectations are that they will keep them at 5 percent; it seems that the worry about rising inflation will outweigh the worry of the UK’s slowing economy.

Struggling homeowners along with prospective buyers will not be pleased to hear that The Bank of England will keep the rate the same, as they were hoping for a little relief.

The housing market is in a bad way at the moment, house prices are now much lower and many housebuilders have to cut jobs who have warned that the outlook for the industry looks grim.

Mortgage rate in Britain are now at the highest they have been for eight years, on a standard two-year fixed-rate mortgage is set at 6.63 percent. This high rate has had an affect on mortgage lender Nationwide Building Society, as they have announced that their consumer index is now at its lowest since May 2004.

King has the worry that the UK’s economy is slowing, part of this problem is due to high oil costs and soaring food prices.

The problem that the Bank of England faces is they are stuck between rising inflation and inflation expectations. Inflation is now one percent tougher than the preferred two percent, governor Mervyn King has said that he expects this to rise to at least four percent later this year.

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