The Centre for Economics and Business Research (CEBR), a leading think tank with an excellent record for correctly forecasting economic performance has said that it believes interest rates will remain at 0.5 per cent until 2016.
The CEBR made the right call on a variety of forecasts for the economy in 2011, beating virtually all other analysts and winning all prizes from organisations that rank prediction success in the UK.
The organisation believes that the Bank of England will hold interest rates at their historic low of 0.5 per cent into 2016. If base rate did stay at that level until January 2016, it would make it an unprecedented 81 months of no change in base rate, the longest period of static rates since the 1940’s.
Scott Corfe at the CEBR said: “The Bank will need to provide ongoing support to the economy through ultra-low interest rates and more quantitative easing. Even when rates go up they are likely to go up only gradually, reaching 1.25 per cent in 2017 and it could take until 2019 to reach three per cent.”