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News - Base rate rise less likelyAugust 17th 2007 - Base rate rise less likely for autumn due to sub-prime crisis and low inflation Financial experts are predicting that a rise in the UK base rate is looking less likely in the autumn due to low inflation and jitters about the UK economy caused by the sub-prime lending failure in the US. As stockmarkets worldwide continue to plummet despite £200 billion worth of support from US and European central banks during the past week, pressure is mounting on the Bank of England to leave the base rate at its current 5.75 percent. Although UK economic performance continues to remain strong, exerting an upward pressure on inflation, the stock market has taken a massive drop so it's thought that a base rate increase is unlikely untill the dust has settled from the sub prime crisis. It had been widely anticipated that the rate would be increased by another quarter point to 6% in the autumn as the Bank sought to put the brakes on inflation and the seemingly unstoppable increase in UK property prices. However, Inflation was down in July, the consumer prices index fell below the government's target of 2% for the first time since March 2006 with a drop from 2.4% in June to 1.9% in July . The reduction in inflation was largely due to heavy competition in the retail sector with supermarkets struggling to undercut each other on the price of food and consumer goods. More Financial NewsHouse prices up - Demand downWealth Gap biggest for 40 yearsBrown promises three million more affordable housesImportant Checks Before You Sign Up For a LoanGetting a Loan when you have a bad history 'more difficult' say Lenders
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