Rate rise effects take years to become clear
(10 April 2007)

It can take years for the full effect of a single interest rate rise to become clear, a high street bank said today.

According to Lloyds TSB, the monetary policy committee's (MPC) decision to keep the interest rate at 5.25 per cent was "predictable" but "wise", although it expects that it will not be long before there is another rate hike.

Trevor Williams, chief economist of Lloyds TSB corporate markets, said: "Last month's meeting resulted in a 8-1 vote for a rate hold, so a swing back the other way may have been a bit too much to expect.

"But before long we could be looking at a very different picture indeed."

Meanwhile, moneysupermarket stated that mortgage borrowers can "breathe easy" but that as inflation figures have increased, a further rate rise is likely "in the near future".