The base rate went up five times between August 2006 and July 2007, and then remained in hold between July 2007 and December 2007. In December the base rate went down by 0.25%, and then went down by the same amount again in February and April.

However, since April the base rate has been on hold at 5%, although many economists and analysts had previously been predicting that the base rate could fall several more times over the course of the year, with some predicting that it could fall below 4% by the end of the year.

However, these predictions have now changed as a result of soaring inflation, and many now think that interest rates will remain on hold this year.

Mr King recently addressed MPs to tell them: ‘The economic slowdown will need to be sufficient to ensure that inflation does not persist above the target.’

He added: ‘But at the same time, we need to avoid a slowdown that is so pronounced that it would pull inflation down, not just to the target, but below.’

One economist said: ‘What is apparent from the testimonies, is that if the Bank of England does change interest rates in the near term, it will be to raise them.’

However, Mr King has recently said that the central bank is aware of the problems with the economy and indicated that interest rates would not be rising.

Recent Additions:

• Fall in number of mortgage approvals for homebuyers
• Just how bad is the UK economy?
• Buy to let mortgage demand is falling
• House prices continue to plummet
• BoE states buyers hoping to get 20% off price of a home

Further rate cuts may be put on hold for this year is a post from: Glitec Loans