Governor Mervyn King Says Rate Will Stay Low
Despite a growth of 1.1 per cent in GDP, the interest rate will not be going up any time soon, says Governor Mervyn King.
Worrying that the use of the word "normal" will not come any time soon in relation to the nation’s financial condition, Governor Mervyn King offered his recommendations to the Monetary Policy Committee (MPC). He suggested the committee keep its "foot firmly on the monetary accelerator" to ensure inflation is closely monitored and if need be managed. Low interest rates will stay constant for now and that is good news for those paying off debts like mortgages and remortgages. Those with savings on their minds, will still struggle to find a bank offering decent rates. Another standout point to arise from the committee meeting was small to medium sized businesses still being locked out of available credit possibilities. Mr. King hesitantly commented on the credit issue by saying: "If we want to use state ownership that would be a way of doing it, not without cost, it may well affect the way people see these banks in the long run, but I think that is the only other instrument I can imagine." But King added that the problem with getting credit could be overcome by encouraging new entrants into the banking system and increasing competition.